The UK’s competition watchdog has said it is seeking views on the relationship between Microsoft and ChatGPT developer OpenAI.

The Competition and Markets Authority (CMA) says it has been closely monitoring the impact of partnerships and strategic agreements which could result in a weakening of competition in the development or use of foundation models (FMs).

It said that the partnership between Microsoft and OpenAI, including a multi-year, multi-billion dollar investment, collaboration in technology development, and exclusive provision of cloud services by Microsoft to OpenAI, represents a "close, multi-faceted relationship" between two firms with significant activities in FMs and related markets.

The regulator said it is providing an early opportunity for comments on whether the partnership between the two companies, including recent developments, has resulted in a relevant merger situation and, if so, the impact that this could have on the UK.

"There have recently been a number of developments in the governance of OpenAI, some of which involved Microsoft," wrote the CMA. "In light of these developments, the CMA is now issuing an ITC [Invitation to Comment] to determine whether the Microsoft / OpenAI partnership, including recent developments, has resulted in a relevant merger situation and, if so, the potential impact on competition."

The CMA added that it is "critical" for there to be sustained competition between AI developers to help deliver innovation, growth and responsible practices across the sector, as well as the need for open and effective competition in the deployment of FMs across a range of downstream activities.

"The invitation to comment is the first part of the CMA’s information gathering process and comes in advance of launching any phase 1 investigation, which would only happen once the CMA has received the information it needs from the partnership parties," said Sorcha O’Carroll, senior director for mergers at the CMA.

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