Microsoft's hiring from backed AI companies finally backfired, raising CMA concerns

Microsoft has a habit of hiring some of the best AI masterminds of companies that the Redmond giant financially backs. Its $650 million deal with Inflection then led the latter’s co-founder Mustafa Suleyman to lead Microsoft’s new AI organization. And, that’s not the only occurrence.

Now, it seems like it’s starting to backfire. 

The UK’s Competition and Market Authority (CMA) announced on Wednesday that it’s opening comments from third parties regarding Microsoft’s “hiring of former employees and related arrangements with Inflection AI.”

The CMA is now assessing whether these partnerships comply with UK merger rules and affect competition, inviting comments until May 9. The authority says, “While we remain open minded, and haven’t drawn any conclusions, our aim is to better understand the complex partnerships and arrangements at play,” 

The British authority has been looking into Microsoft’s AI dealings for months, especially with OpenAI, a company to which the Redmond giant has poured billions of dollars of investment. 

Previously, the CMA has looked into Microsoft and OpenAI’s relationship, which could hurt competition in the UK since it gives Microsoft an “unfair advantage” for having the earliest access to OpenAI’s products.

The CMA is also looking for comments about Microsoft’s relationship with Mistral AI, a French start-up that earned $16 million of investment from Microsoft to bring its Mistral Large model to Azure.