Mustafa Suleyman, co-founder and CEO of Inflection AI UK Ltd., speaks at the World Economic Forum in Davos, Switzerland, on January 18, 2024.
Stefan Warmus | Bloomberg | Getty Images
london – Microsoft’s The recruitment of employees at Inflection AI, an artificial intelligence startup founded by DeepMind co-founder Mustafa Suleyman, has been approved by the British competition regulator and will not face in-depth competition investigations in the country.
The U.K. Competition and Markets Authority said in a statement on Wednesday that the U.S. tech giant’s acquisition of “certain assets” from Inflection did count as a “relevant merger situation” in the U.K. but ultimately “did not result in a realistic prospect of ”. Substantial reduction in competition (SLC) due to horizontal unilateral effects. “
In March, Microsoft announced the hiring of Suleyman from Inflection, along with a number of other key employees at the company. Suleiman was appointed Executive Vice President of Microsoft and CEO of Microsoft Artificial Intelligence. Microsoft’s new division focuses on its artificial intelligence products, including Copilot, the company’s artificial intelligence assistant, integrated into Windows and Microsoft 365
In addition to Suleiman’s new role, the Redmond, Wash.-based tech giant has selected Karen Simonyan to join Microsoft as chief scientist, reporting to Suleiman. Suleyman and Simonyan are both former DeepMind employees. GoogleOwned artificial intelligence laboratory.
In July, the CMA included Microsoft’s hiring of Inflection talent into its preliminary merger investigation on the grounds that the company was evaluating the possibility of a merger under British rules, which could lead to “a significant reduction in competition” in the artificial intelligence industry.
However, on Wednesday, the CMA said it had not identified any risk of a significant lessening of competition after spending some time assessing Microsoft’s arrangement with Inflection. However, it still maintains that the agreement constitutes a valid merger.
Microsoft did not immediately comment when contacted by CNBC on Wednesday.
The CMA has not previously stated clearly how hiring Inflection AI staff would undermine competition. The regulator said it was assessing Microsoft’s “relevant arrangements with Inflection” in addition to staff recruitment.
On Wednesday, the regulator said the arrangements include “non-exclusive license agreements to exploit Inflection IP (intellectual property rights) in a variety of ways.”
Microsoft has not publicly disclosed any details of its licensing arrangement with Inflection, other than to reveal that it has hired “several members” from the company’s 70-person team. Reuters and wall street journal The company reportedly paid $650 million in licensing fees to Inflection to resell its artificial intelligence models through its Azure cloud computing platform.
The Inflection deal is not the only agreement with big tech companies and artificial intelligence startups that UK regulators are evaluating. The CMA has launched a separate ongoing investigation into Microsoft’s multi-billion dollar investment in artificial intelligence giant OpenAI. It is also investigating whether a tie-up between Amazon and artificial intelligence company Anthropic constitutes a merger that could harm competition.
Both Microsoft and Amazon deny that any collaborations with smaller AI companies constitute mergers and stress that the companies they invest in and work with operate independently.
At the same time, the U.S. Federal Trade Commission is also reviewing a number of transactions between large technology companies and artificial intelligence startups, including Microsoft’s agreement with Inflection.
About The Author
