Microsoft's Hiring of Inflection Employees Under Investigation in the U.K
- Microsoft recently hired employees from Inflection AI, an artificial intelligence startup.
- This recruitment has prompted the UK to initiate an initial merger investigation.
- The inquiry seeks to assess any potential competition concerns arising from this hiring.
LONDON — The U.K.'s Competition and Markets Authority (CMA) has initiated an initial investigation into Microsoft's recent hiring of key personnel from the artificial intelligence startup Inflection. This inquiry focuses on whether the recruitment of Mustafa Suleyman, Inflection's co-founder, and a significant portion of its staff constitutes a merger under U.K. regulations, potentially reducing competition in the AI sector. The CMA is expected to announce its decision regarding a more in-depth Phase 2 investigation by September 11. Microsoft's acquisition of Suleyman and other Inflection employees was announced in March, with Suleyman taking on the role of executive vice president and CEO of Microsoft AI. This new division is dedicated to enhancing Microsoft's AI offerings, including the integration of its AI assistant, Copilot, into Windows and Microsoft 365. The CMA's statement did not specify how the hiring could impact competition, but it has previously expressed concerns about Microsoft's broader arrangements with Inflection. The regulator is examining whether Microsoft's actions, including the hiring of Inflection staff, could lead to a "substantial lessening of competition" in the AI market. Additionally, Microsoft had previously held a nonvoting observer seat on OpenAI's board, raising further regulatory scrutiny. Meanwhile, Amazon has made significant investments in the AI space, including a $4 billion stake in Anthropic, which highlights the competitive landscape in the industry.