Microsoft’s “partnership” with OpenAI: The CMA needs to kick the tyres of this deal

In November, Microsoft forced the board of another company to reverse the firing of its CEO, got him reinstated, then appointed an almost entirely new board with itself as a member (albeit one without a formal vote). 

The other company was pioneering AI firm OpenAI, owner of the famous ChatGPT chatbot.  

The situation seemed clear: the tech giant’s $13bn investment in OpenAI had not only bought it a 49% stake, but a degree of power in the company that was decidedly neither micro nor soft.

But no. As Microsoft has been at pains to point out, it apparently neither owns nor controls OpenAI. Instead, they have a “partnership”.

Microsoft’s investment and partnership with OpenAI is what you might call “heavily lawyered” – that is to say, carefully constructed to avoid looking like a buyout. But when the chips were down for Sam Altman, in the end, Microsoft was holding all the cards – not OpenAI’s board. 

This matters because, along with Google and Amazon’s combined $6bn investment in Anthropic, it demonstrates how the same handful of tech behemoths exert huge control over emerging technology like AI.  

If we place this in the context of the last 20 years, we’ve had 20 years of runaway tech mergers that have allowed a few companies – Microsoft, Apple, Amazon, Google etc – to acquire such size and power to be almost immune from democratic control.  

That’s a problem that has caused huge damage in countless different areas of society including our privacy, our security, our consumer choice and the health of our democracies. 

If Microsoft wasn’t able to exert such tight control, in time, companies like OpenAI may have been in a position to challenge its dominance. Clearly, that’s not going to happen now. 

But the revelation that Microsoft is actually calling the shots at OpenAI means competition regulators such as the British Competition and Markets Authority now need to look at the deal – and kick the tyres.  

That’s why we, and our partners at the Irish Council of Civil Liberties, Mozilla Foundation, the Open Market Institute, the Balanced Economy Project, Article 19 and Rebalance Now have written to the CMA asking them to do exactly that.  

The stakes are high. Tech giants were left to swallow the world unchecked for twenty years, gobbling up every competitor and every new piece of tech until their position became almost too powerful to challenge.  

Imagine how different the world could be now, if every major tech innovation of the last 20 years had not been bought and turned into part of the monopoly machine that controls our online world. 

We cannot afford to make that same mistake again with AI.