Key Takeaways

  • The U.K.'s competition watchdog said it's collecting information to determine whether Microsoft's OpenAI partnership could impact competition.
  • After OpenAI CEO Sam Altman was ousted and reinstated by the ChatGPT maker, Microsoft was given a non-voting observer seat on the board.
  • The U.K. regulator noted that the partnership recently led to a "relevant merger situation" and requested comments from the two companies and the public.

The U.K.'s competition watchdog said it's looking into whether Microsoft's (MSFT) partnership with ChatGPT maker OpenAI could impact competition amid the artificial intelligence (AI) boom.

The Competition and Markets Authority (CMA) asked for comments from Microsoft, OpenAI, and the public after "recent developments" that may have "resulted in a relevant merger situation and, if so, the impact that the merger could have on competition in the UK."1

Last month, Microsoft said it would hire OpenAI founder and CEO Sam Altman to lead a new AI team at Microsoft after he was ousted by OpenAI's board, as well as absorb any resigning OpenAI employees. However, Altman was quickly reinstated at OpenAI, and OpenAI granted Microsoft a non-voting observer seat on its board.2

Microsoft is OpenAI's largest shareholder, and has invested billions into the startup, with the CMA noting the partnership "represents a close, multi-faceted relationship between two firms with significant activities."

Microsoft shares were 0.1% higher at $371.51 per share Friday as of about 11:40 a.m. ET, and have gained over 55% year-to-date.