The UK's Competition and Markets Authority (CMA) has determined that Microsoft Corp.'s partnership with artificial intelligence firm Mistral AI does not warrant an antitrust probe. The regulatory body concluded that Microsoft has not acquired the ability to “materially influence” Mistral's commercial policies, leading to the closure of the case.
The CMA's decision indicates that the partnership between Microsoft and Mistral AI does not meet the criteria for a merger investigation under current UK regulations. This decision comes three weeks after the CMA revealed early-stage probes into various AI investments and partnerships by major tech companies, including Microsoft's $16 million investment in Mistral AI. The CMA's assessment is based on the extent of control and influence Microsoft holds over Mistral AI, which has been deemed insufficient to impact the latter's business strategies significantly.
Partnership Details
Microsoft's collaboration with Mistral AI involves leveraging the latter's advanced AI technologies to enhance Microsoft's own AI capabilities. Mistral AI, known for its work on large language models, stands to benefit from Microsoft's extensive resources and market reach. The partnership aims to advance AI applications across various sectors, including finance, healthcare, and technology. The company aims to leverage Microsoft's cloud computing platform Azure for developing and deploying its AI models.
Microsoft's investment is a minority stake, expected to convert to less than 1% equity in Mistral AI during the French startup's next funding round.
Green Light in the UK, EU Investigation Ongoing
The CMA's closure of the case allows Microsoft and Mistral AI to proceed with their collaborative efforts without the burden of an antitrust investigation in the UK. This could set a precedent for future partnerships in the AI industry, emphasizing the need for clear boundaries and balanced influence between collaborating entities. The decision underscores the importance of evaluating the level of control and influence in such partnerships to avoid regulatory scrutiny.
The CMA's other AI partnership investigations, including Microsoft's close ties with OpenAI, remain ongoing, while they already got approval from the EU. The regulator has launched formal invitations to comment from relevant stakeholders in the AI and business spheres, with the European Commission following suit. The CMA's recent actions reflect its commitment to closely monitoring developments in the AI sector, with more announcements expected in the near future.
The CMA's efforts are part of a broader regulatory push to scrutinize investments by dominant tech companies in emerging AI firms. This includes ongoing probes into Amazon's $4 billion investment in Anthropic and Microsoft's hiring of the team behind Inflection AI, another OpenAI rival. The Federal Trade Commission (FTC) in the United States has also launched investigations into Alphabet, Amazon, and Microsoft's AI investments to determine if these partnerships could distort innovation and undermine fair competition.
The European Commission has also initiated an investigation into the partnership, and a decision is still pending. The European Commission is vigilant of such mergers, apprehensive that they could concentrate power within the Big Tech sphere, potentially stifling innovation and fair competition. The Commission says they are meticulously analyzing agreements between large digital market players and AI developers to ensure they do not distort market dynamics unfavorably.
