Microsoft is under scrutiny in the UK as the Competition and Markets Authority (CMA) launches an investigation into whether the tech giant’s hiring of key employees from Inflection AI constitutes a de facto merger. The move follows Microsoft’s acquisition of talent from the AI start-up, including co-founder Mustafa Suleyman, who now heads its new AI division.
The CMA’s initial probe, initiated after it sought public opinions in April, aims to determine whether Microsoft’s actions could potentially stifle competition in the AI sector. This scrutiny comes amid concerns that the departure of crucial personnel from Inflection AI to Microsoft could reduce market diversity and innovation.
According to reports, Microsoft also entered a “non-exclusive licensing deal” to utilize Inflection AI’s AI models, further intertwining the two entities’ operations.
“We are confident that the hiring of talent promotes competition and should not be treated as a merger,”
Mustafa Suleyman, in a statement on social media platform X, expressed enthusiasm about joining Microsoft, noting that he would be joined by several colleagues from Inflection AI, including Karén Simonyan, the company’s chief scientist and his longtime collaborator.
The CMA’s phase one inquiry will assess whether Microsoft’s actions warrant deeper scrutiny under UK competition laws. A decision on whether to clear the transaction or proceed with a more extensive investigation is expected by September 11.
Microsoft’s involvement with Inflection AI underscores the growing importance of AI technologies and talent acquisition in the global tech industry. The outcome of the investigation could have significant implications for Microsoft’s strategy in integrating AI capabilities and its competitive landscape in the UK and beyond.
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