The UK’s Competition and Markets Authority (CMA) has initiated an antitrust investigation into Microsoft’s stake in Inflection AI. The inquiry is particularly focused on Microsoft’s recruitment of former Inflection AI employees. Formal Investigation Phase Begins The CMA has commenced a phase one merger review to examine the Microsoft-Inflection AI partnership. The regulatory body has set a deadline of September 11 to determine whether a deeper investigation is warranted. This phase aims to evaluate the competitive ramifications of Microsoft’s hiring practices within the AI sector. The core of the investigation centers on the movement of Inflection AI employees to Microsoft. The CMA is investigating whether this transition could potentially give Microsoft an unfair competitive edge in the AI industry. This move underscores the heightened regulatory attention that large tech companies are facing, particularly regarding AI and data. Broader Implications for Big Tech This investigation is part of a broader trend where regulators are increasingly scrutinizing the actions of major technology companies. Specifically, their investments and strategic partnerships in emerging tech fields are being closely monitored. The CMA’s active role signifies a growing commitment to oversee how such collaborations might affect market competition. The inquiry will also look into whether Microsoft’s hiring of Inflection AI’s former employees and the associated deals constitute a significant merger situation under the Enterprise Act 2002. The CMA seeks to determine if this has resulted, or could result, in a considerable reduction in competition within any market in the UK. Regulatory Landscape and FTC Probe Last month, US regulator, the Federal Trade Commission, decided to take its own close look at the Microsoft-Inflection AI deal. The FTC is assessing the specifics of Microsoft’s deal with Inflection AI, focusing on the motivations and terms of the partnership. Civil subpoenas have been issued to both companies, requesting documents from the past two years to determine if Microsoft’s arrangement was meant to bypass FTC oversight while still securing control over Inflection’s assets.