Anamika Dey, editor
Brief news
- The UK competition regulator has approved Microsoft’s recruitment of employees from Inflection AI, an AI startup founded by DeepMind co-founder Mustafa Suleyman.
- The regulator concluded that the acquisition of “certain assets” from Inflection does not pose a substantial lessening of competition in the AI sector.
- Microsoft has not disclosed the specifics of its licensing agreement with Inflection but has acquired several members of the company’s team and paid $650 million in licensing fees.
Detailed news
LONDON — The United Kingdom’s competition regulator has approved Microsoft’s recruitment of employees from Inflection AI, an artificial intelligence startup founded by DeepMind co-founder Mustafa Suleyman. The company will not be subject to an exhaustive competition investigation in the country.
In a statement issued on Wednesday, the Competition and Markets Authority stated that the U.S. tech giant’s agreement to acquire “certain assets” from Inflection is considered a “relevant merger situation” in Britain. However, the authority concluded that the acquisition “does not give rise to a realistic prospect of a substantial lessening of competition (SLC) as a result of horizontal unilateral effects.”
Microsoft announced the employment of Suleyman from Inflection in March, in addition to several other significant employees at the company. Suleyman was appointed as the CEO of Microsoft AI and executive vice president of Microsoft. The newly established Microsoft unit concentrated on its artificial intelligence products, such as Copilot, the company’s AI assistant, which it integrated into Windows and Microsoft 365.
In addition to Suleyman’s new position, the Redmond, Washington-based technology company also appointed Karen Simonyan as its chief scientist, who will report to Suleyman. Suleyman and Simonyan were both former employees of DeepMind, the AI center owned by Google.
The CMA referred Microsoft’s employment of Inflection personnel for an initial merger investigation in July. The CMA was evaluating the potential for a “substantial lessening of competition” within the AI sector, which could be a result of a merger under U.K. rules.
Nevertheless, the CMA announced on Wednesday that it did not identify any danger of a significant reduction in competition as a result of Microsoft’s partnership with Inflection, following a thorough assessment. Nevertheless, it maintained its conviction that the agreement amounted to a merger that was effective.
A response from Microsoft was not immediately forthcoming when CNBC reached out to the company on Wednesday.
The CMA had not previously specified the precise manner in which the recruitment of Inflection AI employees could potentially impede competition. In addition to the recruitment of the employees, the regulator evaluated Microsoft’s “entry into associated arrangements with Inflection.”
The regulator stated on Wednesday that the arrangements involved a “nonexclusive licensing agreement to utilize Inflection IP [intellectual property] in a variety of ways.”
Microsoft has not disclosed any specifics regarding its licensing agreement with Inflection; it has only disclosed that it has acquired “several members” of the company’s 70-person team. The firm paid Inflection $650 million in licensing fees to resell its AI models via its Azure cloud computing platform, according to Reuters and The Wall Street Journal.
The Inflection arrangement is not the sole agreement between a Big Tech company and an AI startup that regulators in the United Kingdom are currently evaluating. The CMA is currently conducting a distinct investigation into Microsoft’s multibillion-dollar investment in the AI colossus OpenAI. It is also examining whether a partnership between Amazon and AI company Anthropic is a merger that could potentially impair competition.
Microsoft and Amazon have both denied that any of their partnerships with smaller AI firms constitute mergers, emphasizing that the companies they are investing in and collaborating with are operating independently.
Concurrently, the Federal Trade Commission in the United States is conducting an assessment of numerous agreements between major technology corporations and AI firms, such as Microsoft’s partnership with Inflection.
Source : CNBC News
