The UK’s Competition and Markets Authority (CMA) has given the green light to Microsoft’s $13 billion (A$20.52 billion) investment in OpenAI, concluding a 14-month investigation into the tech giant’s stake in the AI research firm.

The CMA determined that the deal does not grant Microsoft de facto control over OpenAI and therefore it does not warrant further scrutiny under UK merger laws.

The decision is a significant regulatory win for Microsoft, removing one hurdle in its expanding AI strategy. The ruling comes as the US Federal Trade Commission (FTC) continues to assess the investment’s impact on the broader AI landscape, particularly regarding concerns over Microsoft’s growing dominance in cloud computing and artificial intelligence.

The CMA’s review was part of a broader global effort to ensure Big Tech’s investments in AI do not stifle competition. While Microsoft was found to have acquired “material influence” over OpenAI since its initial investment in 2019, the CMA ruled that its latest financial commitment does not equate to a change in control.

OpenAI

Microsoft currently holds an estimated 49% stake in OpenAI and has invested over $14 billion in the company since 2019. Its partnership with OpenAI has given it a leading position in the AI race, integrating OpenAI’s models into its suite of products, including Azure cloud services and enterprise software solutions.

The decision reflects a shift in the UK’s regulatory stance, with increasing pressure on agencies to streamline decision-making processes and reduce bureaucratic delays.

Joel Bamford, the CMA’s executive director of mergers, acknowledged the prolonged nature of the investigation but defended the agency’s approach given the evolving dynamics of AI partnerships.

“We are not blind to the length of time that this investigation has taken,” said Bamford in a LinkedIn post. “However, the degree of complexity and continued dialogue with the companies led to an extended period of review.”

With global regulators keeping a close watch on AI investments, the CMA’s ruling could set a precedent for other tech firms seeking strategic AI alliances. The agency has previously cleared Google’s partnership with AI firm Anthropic.

While the UK decision provides some regulatory clarity, Microsoft’s AI ambitions remain under scrutiny elsewhere. The FTC’s ongoing investigation could pose additional challenges, particularly given concerns that Microsoft’s dominance in cloud computing might extend unfairly into the AI sector.