Inflection AI co-founder Mustafa Suleyman joined Microsoft as CEO of Microsoft AI in March, taking “a number of” co-workers with him. Now, the UK’s Competition and Markets Authority (CMA) has launched an investigation into whether this and other Microsoft deals with Inflection should be deemed anti-competitive.
The CMA has until 11 September 2024 to decide whether to continue the investigation.
Why Microsoft's hiring of Inflection caught the CMA's attention
The investigation will examine “whether it is or may be the case that Microsoft Corporation’s recruitment of certain former Inflection employees and its conclusion of associated agreements with Inflection have given rise to the creation of a relevant merger situation,” the CMA wrote on July 16.
If so, the combined company could create a “substantial lessening of competition in any UK market or markets for goods or services,” the CMA wrote, which would fall under the authority’s jurisdiction.
In a statement to the BBC, a Microsoft spokesperson said: “We are confident that hiring talent promotes competition and should not be treated as a merger.”
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CMA continues investigation into 'interconnected network' of AI companies
The research highlights the complex web of relationships between AI players. Suleyman previously worked at Google DeepMind and then co-founded Inflection with Karen Simonyan (Simoyan moved to Microsoft AI as chief scientist under Suleyman).
Inflection AI creates a generative AI chatbot called Pi, which aims to be a “friendly and supportive companion.” It hosts Inflection 2.5, the large language model behind Pi, on Microsoft Azure.
The CMA focused on Inflection AI in April, when Inflection AI was mentioned as part of a request for comments on “AI partnerships and other arrangements.” Specifically, the CMA highlighted several relationships between giant tech companies and AI startups:
- Microsoft and Mistral AI.
- Amazon and Anthropic.
- Microsoft and Inflection AI.
The CMA has also been investigating OpenAI. The close relationships between AI industry players “could be exacerbating existing positions of market power through FMs”. [foundation models] “The AI industry contains an interconnected network of more than 90 strategic partnerships and investments involving the same companies,” the CMA wrote in April.
