The United Kingdom’s Competition and Markets Authority (CMA) has announced the closure of its investigation into the partnership between Microsoft and OpenAI.
The decision follows an assessment that Microsoft does not hold de facto control over the artificial intelligence company, thereby negating the need for a merger review.
The partnership between Microsoft and OpenAI began in 2019 when the tech giant made an initial investment of $1 billion. Since then, Microsoft has continued to support OpenAI’s development, prompting regulatory scrutiny in both the UK and the United States. The inquiry gained momentum following internal conflicts within OpenAI, including the temporary departure and reinstatement of CEO Sam Altman in 2023, which raised concerns about the company’s governance and structure, Reuters reported.
The CMA, which launched its inquiry in December 2023, examined whether Microsoft’s growing influence over OpenAI constituted a merger situation under the Enterprise Act 2002. The agency’s Phase 1 review assessed whether this partnership could lead to a substantial lessening of competition in the UK’s technology market.
After months of deliberation, the CMA concluded on March 5, 2025, that Microsoft had not gained the level of control necessary for the partnership to qualify as a merger. While the authority acknowledged that Microsoft had acquired “material influence” over OpenAI, it determined that this did not amount to de facto control under UK merger regulations.
Despite this conclusion, the CMA clarified that its decision does not imply an absence of competition concerns. The regulatory body continues to monitor collaborations between major technology firms and AI startups to ensure fair competition within the industry.
A spokesperson for Microsoft welcomed the CMA’s findings, stating that the company’s partnership with OpenAI fosters competition, innovation, and responsible AI development. “We appreciate the CMA’s careful consideration of commercial realities and its decision to close the investigation,” the spokesperson added.
In recent years, the CMA has increased its scrutiny of major tech companies’ investments in AI firms. Aside from Microsoft and OpenAI, the agency has examined partnerships such as Microsoft’s collaboration with Mistral AI, Amazon’s investment in Anthropic, and Google-owner Alphabet’s relationship with Anthropic. None of these arrangements, however, have met the regulatory threshold for full-scale merger investigations.
In addition to its merger control powers, the CMA recently acquired new regulatory authority to investigate major technology firms deemed to have “strategic market status.” Under this expanded mandate, the agency has already launched inquiries into Apple’s and Google’s smartphone ecosystems, as well as Google’s search services.
The appointment of Doug Gurr, a former Amazon executive, as the CMA’s interim chair in January 2025 suggests a potential shift in regulatory approaches. Analysts speculate that under Gurr’s leadership, the CMA may take a more measured stance on tech industry partnerships and acquisitions.
While the CMA’s decision marks the end of this specific probe, the broader regulatory landscape for AI and technology partnerships remains dynamic. As AI technology continues to evolve, regulators worldwide are likely to maintain vigilance over the competitive impacts of collaborations between tech giants and innovative startups.
