Microsoft hires from Inflection AI now under microscope from competition watchdog
The UK’s competition watchdog has launched an inquiry into Microsoft’s hiring of former employees from Inflection AI, a US-based startup which Microsoft invested in last year.
The Competition and Markets Authority (CMA) announced on Tuesday it has “sufficient information” to open an investigation into Microsoft’s recruitment of certain ex-Inflection AI staff and the tech giant’s related arrangements with Inflection.
The regulator said it “is considering whether it is or may be the case that Microsoft Corporation’s hiring of certain former employees of Inflection and its entry into associated arrangements with Inflection has resulted in the creation of a relevant merger situation.”
Microsoft has arrangements with Inflection AI, which is building a ‘personal’ AI for everyone, such as a non-exclusive licensing deal allowing it to use the startup’s existing models.
The CMA has set an 11 September deadline to decide whether the case will progress to a phase two investigation.
Last year, Microsoft took part in a $1.3bn (£1bn) funding round for Inflection, investing $650m (£502m) to hire the startup’s chief executive Mustafa Suleyman, co-founder of Google’s DeepMind, along with several team members, and to license its technology in March.
Microsoft said: “We are confident that the hiring of talent promotes competition and should not be treated as a merger. We will provide the UK Competition and Markets Authority with the information it needs to complete its inquiries expeditiously.”
City PM has approached Inflection AI for comment.
Earlier this year, the CMA launched three investigations into whether Microsoft and Amazon’s partnerships with startups Mistral AI, Anthropic and Inflection AI, have resulted in relevant merger situations.