The UK Competition and Markets Authority (CMA) has announced an investigation into Microsoft Corporation's hiring of employees from Inflection AI, focusing on whether this constitutes anti-competitive behavior. This investigation is part of the CMA's in-depth study of the "interconnected network" among AI companies.
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The CMA points out that Mustafa Suleyman, co-founder of Inflection AI, joined Microsoft as the Chief AI Officer in March 2024, bringing along several colleagues. This personnel change has attracted the high attention of the regulatory authorities, and the CMA will examine the relevant arrangements between Microsoft and Inflection AI in the investigation to assess whether they lead to the formation of a "relevant merger situation."
According to the CMA's statement, if the combination of Microsoft and Inflection AI results in a significant reduction in competition for goods or services in the UK market, this situation would fall within the CMA's regulatory scope. Microsoft has expressed confidence in its hiring practices, believing that such actions should be seen as promoting competition rather than constituting a merger.
Additionally, the CMA's investigation is not limited to the relationship between Microsoft and Inflection AI but also includes collaborations between other large tech companies and AI startups. For example, partnerships between Microsoft and Mistral AI, Amazon and Anthropic, among others, are also on the CMA's radar. The CMA noted in April that there are complex cooperative relationships among multiple players in the AI industry, which could intensify existing competitiveness in the market.
Inflection AI is known for its generative AI chatbot Pi, which is designed to be a "warm and supportive" companion, with its large language model Inflection2.5 hosted on Microsoft's Azure cloud platform. Against this backdrop, the CMA further scrutinizes the collaboration models of Inflection AI with other tech giants, emphasizing that these relationships could influence market power through the value chain of foundational models (FMs).
The CMA plans to decide whether to continue this investigation by September 11, 2024, a decision that will have significant implications for the future market landscape.
### Key Points:
1. 🔍 The UK Competition and Markets Authority (CMA) is investigating the situation of Microsoft hiring former employees from Inflection AI to determine if it constitutes anti-competitive behavior.
2. 💼 Inflection AI co-founder Mustafa Suleyman joined Microsoft in March 2024, taking several colleagues with him, which has raised concerns from the regulatory authorities.
3. ⚖️ The CMA will decide whether to continue the investigation by September 11, 2024, and if a merger situation is deemed to exist, it could have a significant impact on market competition.