Microsoft's OpenAI gets green light from UK watchdog

The UK competition watchdog has dropped its review of Microsoft's partnership with OpenAI, saying it's satisfied that the deal doesn't need a closer investigation under the country's merger rules.

The Competition and Markets Authority (CMA) said that based on "available evidence," the partnership between the US tech giant and the ChatGPT maker doesn't qualify for a merger investigation.

“In particular the CMA does not consider there has been a change of control by Microsoft from material influence to de facto control over OpenAI," the watchdog said.

Microsoft was a big initial backer of OpenAI, plowing billions of dollars into the San Francisco-based startup in its early days.

But since then OpenAI has attracted other big investors including Japan's Softbank and chipmaker Nvidia after its success with ChatGPT.

"The AI sector is still rapidly evolving. Material aspects of the Partnership have been changing over the course of the investigation," the CMA added in a statement.

The CMA has stepped up scrutiny of AI deals amid a wave of investment from Big Tech companies into startups working on generative artificial intelligence (AI).

Last year it approved another Microsoft deal involving Inflection AI as well as partnerships with chatbot maker Anthropic by Google and Amazon.