Microsoft might not realize its iPhone moment with AI if regulators continue to reign down on its parade

What you need to know

  • Microsoft is under scrutiny by the UK's Competition and Markets Authority (CMA) for its newly-found AI partnerships.
  • The investigation will also cover Microsoft's hiring of former employees and related arrangements with Inflection AI.
  • Microsoft recently evaded a formal probe by the EU after it established its multi-billion investment in OpenAI and its technology wasn't an acquisition and didn't have control over its business model.

Antitrust watchdogs seem to be onto Microsoft, and there's no sign of letting up any time soon. It's barely been a week since the tech giant eluded formal probe by the EU over its complicated relationship with OpenAI. The antitrust regulator established Microsoft's multi-billion dollar investment in the hot startup wasn't an acquisition and didn't have control over its operations, ultimately clearing any looming merger concerns.

As it happens, Microsoft isn't out of the woods yet. UK-based Competition and Markets Authority (CMA) has launched a preliminary investigation. It'll focus on "Microsoft and Mistral AI, and Amazon and Anthropic, and Microsoft’s hiring of former employees and related arrangements with Inflection AI."

Why is Microsoft under scrutiny again?

(Image credit: Future)

The regulator has requested comments from parties with insight into Microsoft's and Amazon's partnership with AI companies. As you may be aware, Microsoft recently got into a new multiyear deal with French startup Mistral AI to further affirm its position in the AI landscape.

At the time, OpenAI was under investigation by the Securities and Exchange Commission (SEC), following last year's fiasco where the board of directors decided to fire and reinstate Sam Altman as CEO under a week.

While the EU's investigation on Microsoft didn't warrant a formal probe, the CMA plans to look into the company's "hiring of former employees and related arrangements with Inflection AI." This can be centered on Microsoft's recent reorg, which moved Bing, Edge, and Copilot under its new AI division led by DeepMind and Inflection co-founder Mustafa Suleyman.

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The UK-based antitrust watchdog will continue to receive comments on this specific issue till May 9, 2024. It'll use these comments to establish whether Microsoft's partnership falls within UK merger rules or promotes "anti-competitive" business practices in the region.

If found culpable of this offense, the regulator will recommend actions to curate fair business practices for its rivals in the landscape. Unfortunately, this might deter the tech giant from realizing its full potential. Market analysts predict Microsoft is on the brink of reaching its iPhone moment with AI which has already made it rank as the world's most valuable company with over $3 trillion in market capitalization ahead of Apple. 

Kevin Okemwa

Kevin Okemwa is a seasoned tech journalist based in Nairobi, Kenya with lots of experience covering the latest trends and developments in the industry. With a passion for innovation and a keen eye for detail, he has written for leading publications such as OnMSFT, MakeUseOf, and Windows Report, providing insightful analysis and breaking news on everything revolving around the Microsoft ecosystem. While AFK and not busy following the ever-emerging trends in tech, you can find him exploring the world or listening to music.