UK's CMA greenlights Microsoft's hire of Inflection top AI minds after months-old controversy

Another saga in the Microsoft Inflection AI deal: the UK’s Competition and Markets Authority (CMA) has now “cleared Microsoft’s hiring of certain former employees of Inflection.”

The clearance decision came months after the antitrust body started investigating Microsoft’s $650 million deal with Inflection AI over concerns it might reduce competition. CMA has now acknowledged the deal as a merger but it does not pose a threat to the competition.

Joel Bamford, CMA’s executive director for mergers, said after the Phase 1 review that the CMA identified no significant concerns regarding the transfer of employees between Microsoft and Inflection AI as the startup company doesn’t pose as a major competitor to Microsoft’s existing chatbot products.

“Today we announced that our Phase 1 investigation has found that the transfer of employees, coupled with other tactical arrangements, means that two enterprises are no longer distinct,” he mentions.

This inquiry, initiated in April 2024, was part of a broader examination to determine whether this relationship created a potential merger situation under the Enterprise Act 2002 and whether it might lead to a significant reduction in competition.

Back in March this year, Microsoft struck the $650 million deal with Inflection, allowing it to use Inflection’s AI models and hire most of its staff, including co-founders Mustafa Suleyman and Karen Simonyan. The former now leads Microsoft AI while Simonyan is the chief scientist at the newly-formed organization.

But such a deal faced criticism due to the transfer of employees, as Microsoft is no stranger to the practice. Microsoft’s billion-dollar investment into OpenAI was also put under the microscope, especially after the saga that left CEO Sam Altman briefly leaving the company and was scooped by Microsoft before returning.