The UK’s Competition and Markets Authority (CMA) has approved Microsoft’s $13 billion partnership with OpenAI, ruling that the deal does not require a full investigation under UK merger regulations.
The regulator had been examining whether Microsoft’s deepening ties with OpenAI constituted a de facto takeover, which could have raised competition concerns. However, after an extensive review, the CMA determined that while Microsoft exerts “material influence” over OpenAI, it does not hold outright control over the company.
The probe stemmed from OpenAI’s internal turmoil in November 2023, when CEO Sam Altman was briefly removed and later reinstated, prompting concerns over Microsoft’s influence due to its significant financial investment and integration of OpenAI’s AI models into its products.
Following a detailed analysis of internal documents and discussions with both companies, the CMA concluded that Microsoft plays a significant role in OpenAI’s operations—particularly through funding, technology, and cloud computing—but does not dictate the company’s strategic decisions.
Joel Bamford, Executive Director of Mergers at the CMA, explained the ruling: “Looking at the evidence in the round (including the recent changes), we have found that there has not been a change of control by Microsoft from material influence to de facto control over OpenAI. Because this change of control has not happened, the partnership in its current form does not qualify for review under the UK’s merger control regime.”
Although this decision is a win for Microsoft, the CMA was clear that it does not absolve the partnership of potential competition concerns. The regulator stressed the importance of continued oversight as AI technology continues to evolve.
Bamford added: “The CMA’s findings on jurisdiction should not be read as the partnership being given a clean bill of health on potential competition concerns; but the UK merger control regime must of course operate within the remit set down by Parliament.”
The extended review process—lasting over 14 months—was influenced by the shifting nature of the Microsoft-OpenAI relationship. In early 2025, Microsoft made contractual adjustments to reduce OpenAI’s dependence on its cloud infrastructure, a move that likely contributed to the CMA’s approval.
The ruling provides regulatory relief for Microsoft, which has been under increasing scrutiny over its AI investments. In the U.S., the Federal Trade Commission (FTC) has expressed concerns that Microsoft’s partnership with OpenAI could reinforce its dominance in cloud computing and give it an unfair advantage in the AI sector.
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