The Competition and Markets Authority (CMA) in the UK is said to be examining Microsoft’s partnership with OpenAI and will determine if it could be considered a merger.

The watchdog is looking into whether Microsoft’s work with OpenAI could affect the AI market overall.

Microsoft has said it had “preserved independence” for both.

The relationship has come under focus following a recent upheaval at OpenAI, plunging into chaos last month when boss Sam Altman was suddenly fired.

Following the incident, Microsoft offered him a job leading a new advanced AI research team, before the team at OpenAI reinstated him after an appeal from employees.

This drama drew attention to how commercial competition is shaping the development of AI systems, as well as the pace technology is moving at.

This caused confusion about the future of OpenAI, while Microsoft Chief Executive Satya Nadella, previously said governance at the firm needed to change.

The CMA is asking for comments, partly “in light of these developments.” It’s questioning whether the partnership has resulted in an “acquisition of control,” whether an effective merger took place, and if it could affect UK competition.

Third parties have been asked for their comments, which could lead to the launch of a probe if necessary.

Senior Director for Mergers at CMA, Sorcha O’Carroll said, “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.”

In response, Microsoft said the partnership has “fostered more AI innovation and competition.”

Vice Chair and President of Microsoft, Brad Smith said the only thing that’s changed is it “will now have a non-voting observer on OpenAI’s board.”

This means they will have access to confidential information, but won’t be able to vote on matters including choosing directors, or have control over operations.

On Friday, Microsoft disputed reports it owns any OpenAI stake, saying details of the agreement are confidential, but it’s entitled to a share of profits.

Mr. Smith added Microsoft will work closely with the CMA to provide all information required.

An OpenAI spokesperson said, “Our partnership with Microsoft empowers us to pursue our research and develop safe and beneficial AI tools for everyone, while remaining independent and operating competitively.”

Mr. Smith has previously denied the recent drama was due to concerns around the safety of the technology. Fears AI would overtake humans in the next year were unfounded.

“There’s absolutely no probability that you’re going to see this so called artificial general intelligence where computers are more powerful than people come in the next 12 months. It’s going to take years, if not many decades.”

Sam Altman was co-founder of OpenAI, and became the face of ChatGPT after it launched last year. He also secured a significant funding boost from Microsoft.

One of the board members who fired him said its goal was to “strengthen OpenAI and make it more able to achieve its mission.”

Academic and former board member, Helen Toner, didn’t answer questions about interactions with Altman, but said the move was due to a “lack of trust” in him.

Reportedly, there was a clash between the two after Helen’s work on an AI safety paper was published, suggesting other tech companies had fast-tracked AI products to keep up with OpenAI.

She said, “OpenAI is a very unusual organisation, and the non-profit mission – to ensure [artificial general intelligence] benefits all of humanity – comes first.”