(Photo by Jakub Porzycki/NurPhoto via Getty Images)
UK regulators have launched a formal antitrust investigation into Microsoft over its hiring of executives from Inflection AI, a Palo Alto startup that's creating its own ChatGPT rival, dubbed Pi.
In March, Microsoft poached two of Inflection's co-founders, Mustafa Suleyman and Karén Simonyan, to help lead a new division at Redmond called Microsoft AI. Several Inflection staffers also jumped ship and joined Microsoft. Inflection said it would continue on under a new CEO while hosting the lab’s AI models via Microsoft’s Azure cloud service.
The news prompted the UK’s Competition and Markets Authority (CMA) to launch a preliminary investigation in April to determine whether the move could undermine competition in the UK.
"Though these partnerships have the potential to bring pro-competitive benefits, the CMA remains vigilant against the possibility that incumbent technology firms could use partnerships and investments to shield themselves from competition,” the CMA said at the time.
The agency then invited the public to comment on Microsoft’s hiring of the Inflection AI staffers and its partnership with French AI startup Mistral, as well as Amazon's investment in Anthropic.
On Tuesday, the CMA formally launched a "merger inquiry" into the hirings, which will culminate in the agency deciding whether to continue a second-phase probe by a Sept. 11 deadline.
The investigation could be long if the CMA finds that Microsoft’s hiring of the Inflection AI staffers risks lessening competition in the market. UK regulators could try to negotiate with Microsoft to remedy the issue or impose a stiff penalty if the company refuses to comply.
Microsoft didn’t immediately respond to a request for comment. In the meantime, the CMA has also launched an antitrust probe into the company's billion-dollar relationship with ChatGPT developer OpenAI.