Competition Authorities likely to Stay out of Microsoft-OpenAI Power Struggle for now

Microsoft is luring top execs and AI engineering talent from OpenAI, raising questions about the impact on competition regulators. Efforts to reinstate CEO Sam Altman reportedly failed over the weekend, with Altman opting to join Microsoft. Hundreds of OpenAI staff members threaten to quit and join Microsoft if the board does not reappoint Altman and president Greg Brockman. Microsoft insists it is more committed than ever to its partnership with OpenAI, projecting business as usual. However, its approach with OpenAI raises potential antitrust concerns. The UK tried to block Microsoft’s gaming mega-merger with Activision, but Microsoft proposed a restructuring to gain approval. The European Union also imposed conditions to get the deal approved. Microsoft and OpenAI’s relationship is halfway to an M&A. Furthermore, its market power in cloud computing raises concerns of dominance over the advanced AI market. However, competition regulators find it difficult to take action, as Microsoft’s involvement is based on cooperation and not substantial investments in OpenAI. While the German Federal Cartel Office finds no merger notification obligation between Microsoft and OpenAI, they warn they will continue to monitor potential competition concerns. TechCrunch has contacted the FCO to ask whether the latest developments in the partnership, such as the transfer of the CEO and president, will change their approach.