Science & Technology

UK Regulator to Review Microsoft and OpenAI Partnership

The British competition watchdog has formed the basis for launching an investigation into the partnership between Microsoft and OpenAI, which created the world’s most popular artificial intelligence-based chatbot called ChatGPT.

UK Regulator to Review Microsoft and OpenAI Partnership

The Competition and Markets Authority (CMA) stated on Friday, December 8, that this British regulator drew attention to the relationship between the technology giant and the developer of the world’s most popular chatbot based on artificial intelligence after certain problems occurred in the management of OpenAI, which to some extent resembled the confusion that began with the resignation of the company’s CEO Sam Altman and ended with his return to this post.

The firm that created ChatGPT was founded as a non-profit organization, the board of which controls the commercial unit. The company’s largest investor is Microsoft.

The CMA claims that after the aforementioned problems in the management of OpenAI, the regulator decided to reconsider whether the partnership between the developer of the world’s most popular artificial intelligence-based chatbot and the technology giant led to what the watchdog designated as the acquisition of control.

Microsoft currently has a non-voting observer position on the OpenAI board. Alex Haffner, a partner at London-based law firm Fladgate, says that the CMA intends to find out what changes have occurred in the interaction between Microsoft and one of the world’s most successful startups in the sphere of digital intelligence after the problems associated with the resignation of Sam Altman, which was never implemented. According to him, the watchdog intends to consider this issue in the broader context of the regulation of the artificial intelligence industry by the British authorities.

Microsoft CEO Satya Nadella, after reports of Sam Altman’s dismissal, said that the company he headed did not participate in the discussion of this decision. Before the events in the leadership of OpenAI, Mr. Nadella stated that this startup does not exist without the technology giant he heads leaning towards partnering with the developer of the world’s most popular AI-based chatbot in fulfilling its mission.

Microsoft, which has a market value of $2.8 trillion, invested $13 billion in the creator of ChatGPT. A few days after Sam Altman’s dismissal, Satya Nadella announced that the head of OpenAI had been hired to lead the new artificial intelligence arm at his company. But this personnel appointment remained in the world of words, not materialized in the space of action. The reason for this was the return of Sam Altman to his post at OpenAI.

The CMA also intends to find out whether the cooperation between a startup and a technology giant is a factor influencing competition. As part of the first stage of the investigation, the regulator will determine the extent of the partnership’s impact on the state of affairs in the technology industry or conclude that it does not exist. This was stated by Alex Haffner.

The watchdog stated that the partnership, involving multi-billion-dollar multi-year investments and collaboration in the sphere of technology development, is a close and multifaceted relationship between the companies.

Microsoft has provided OpenAI with access to the computing power needed to train and operate artificial intelligence models.

The CMA closely monitors the state of affairs in the sphere of advanced technology development. The regulator carries out monitoring to identify potential problems with competition and consumer protection.

In September, the CMA announced its interest in OpenAI-style investments. Then the regulator stated its intention to closely monitor the impact of technology giants’ investments in artificial intelligence developers. In this context, The watchdog noted that it is extremely important to prevent the situation of the dominance of several large companies in the AI market.

The regulator said it was ready to receive comments from interested parties. Sorcha O’Carroll, senior director of mergers at the CMA, said that communicating with companies is a mandatory procedure as part of gathering information before starting an investigation.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.