Microsoft Faces Investigation by UK Regulators Over Ties to Inflection AI—Here's Why

U.K. regulators are opening an investigation into Microsoft's (MSFT) hiring of erstwhile Inflection AI labor and related agreements pinch nan artificial intelligence (AI) start-up.

The Competition and Markets Authority (CMA) said Tuesday it is examining really nan moves by Microsoft could impact title successful nan AI marketplace and whether they efficaciously created a merger.

Microsoft Reportedly Hired Inflection Staff Amid $650 Million Deal

Microsoft reportedly paid $650 million to licence Inflection's exertion earlier this year, arsenic good arsenic hired elder members of nan Inflection team, drafting scrutiny of nan statement amid concerns it could break antitrust rules for mergers and acquisitions (M&A).

The institution announced that it hired Inflection co-founder Mustafa Suleyman and Inflection Chief Scientist Karén Simonyan to subordinate its AI portion successful March. Microsoft presented this arsenic a hiring determination to build its AI unit, alternatively than an acquisition scenario.

The tech elephantine reported that "several members of nan Inflection squad person chosen to subordinate Mustafa and Karén astatine Microsoft," including "some of nan astir accomplished AI engineers, researchers, and builders successful nan world."

Inflection said nan Microsoft hiring was an "important change," and announced during this clip that its Inflection-2.5 AI exemplary would beryllium hosted connected Microsoft Azure.

UK Regulators Latest To Investigate Microsoft

The CMA is nan latest regulator to denote an investigation into nan narration betwixt Microsoft and Inflection.

The Federal Trade Commission (FTC) is besides reportedly investigating Microsoft's actions pinch Inflection AI to find if they violated antitrust rules for M&A.

The CMA is already examining Microsoft and Amazon's (AMZN) AI partnerships for impacts connected competition.

Microsoft has established itself arsenic an early AI leader done its ongoing partnership with ChatGPT maker OpenAI, which has drawn nan attraction of title regulators arsenic well.

Microsoft shares were small changed successful early trading connected Tuesday. The banal has gained astir complete 19% since nan commencement of nan year.