UK regulator greenlights Microsoft's Inflection acquihire, but also designates it a merger
The UK antitrust regulator has said that Microsoft's Inflection 'aqui-hire' counts as a merger, but doesn't cause competition concerns.
Good news for Microsoft: The U.K.’s antitrust regulator says that the tech titan’s high-profile acquihire of the team behind AI startup Inflection doesn’t cause competition concerns, and thus it won’t be pursuing a full-scale investigation.
However, the Competition and Markets Authority (CMA) says that the deal does fall under its regulatory purview as a “relevant merger situation,” meaning similar deals in the future may still be investigated on competition grounds — even if a full acquisition has not taken place.
The ‘quasi-merger’
Microsoft launched a new consumer AI division back in March, spearheaded by the founders of Inflection which included Google DeepMind co-founder Mustafa Suleyman. CEO Satya Nadella confirmed that a number of other Inflection AI members had joined Microsoft’s new AI unit, such as AI scientist Jordan Hoffmann who is now heading up Microsoft’s U.K. AI hub in London.
Back in July, CMA revealed that it was launching a “phase 1” merger inquiry into the deal, kickstarting an investigation to gather evidence and decide whether to proceed with a full probe. Central to the initial phase was whether the deal could in fact be investigated as a “merger,” given that Microsoft hadn’t actually acquired Inflection AI. And if it did qualify as a merger, whether further action is required to counter competition concerns.