UK regulator CMA clears Microsoft and OpenAI’s $13 billion partnership after 14-month investigation

UK regulator CMA (Competition and Markets Authority) has officially dropped its investigation into Microsoft’s multi-billion dollar partnership with OpenAI, concluding that the relationship does not qualify for scrutiny under the UK’s merger regulations.

The Competition and Markets Authority (CMA) announced on Wednesday that after a comprehensive 14-month investigation, it found that while Microsoft maintains “significant influence” over OpenAI, it does not exercise the level of control that would warrant further regulatory action.

UK regulator CMA’s investigation 

The CMA initiated its probe in December 2023, examining whether Microsoft’s substantial investment in OpenAI—totaling nearly $14 billion since 2019—constituted a merger situation that could potentially harm competition in the rapidly evolving AI market.

“Overall, taking into account all of the available evidence, the CMA does not believe that Microsoft currently controls OpenAI’s commercial policy, and instead exerts a high level of material influence over that policy,” the regulator stated in its decision.

The investigation had intensified following the dramatic leadership crisis at OpenAI in November 2023, when CEO Sam Altman was briefly ousted before being reinstated. Microsoft’s involvement in Altman’s return raised concerns that the tech giant might have gained de facto control over OpenAI’s operations.

However, the CMA concluded that no transfer of control had occurred that would create a relevant merger scenario requiring further scrutiny.

A Microsoft victory

This regulatory clearance represents a major victory for Microsoft, which has deeply integrated OpenAI‘s technology across its product ecosystem. The company has leveraged OpenAI’s innovations to power its Copilot AI assistants and enhance its Azure cloud services, giving it a competitive edge in the AI race.

A Microsoft spokesperson welcomed the decision, stating that their partnership with OpenAI “promotes competition, innovation, and the responsible development of AI.” The spokesperson added that the CMA’s conclusion came after “a thorough and careful review of the business facts.”

The timing of this clearance is particularly advantageous for Microsoft as OpenAI continues its transition toward a more profit-oriented business model. Without regulatory constraints, Microsoft can continue to benefit from its early and substantial investment in what has become one of the world’s most valuable AI companies.

Evolving competitive landscape

Since Microsoft’s initial investment, OpenAI’s investor base has diversified significantly. The San Francisco-based AI lab has attracted other major backers, including Japan’s SoftBank and semiconductor giant Nvidia, following the tremendous success of its ChatGPT product.

This evolution in OpenAI’s funding structure likely contributed to the CMA’s assessment that Microsoft does not exercise controlling influence over the company, despite being its earliest major corporate backer.

The decision comes as Microsoft’s stock continues to perform strongly, trading at approximately $391.60 as of March 5, 2025, with a market capitalization of nearly $3 trillion. Wall Street analysts maintain a generally positive outlook on the company, with the majority assigning “buy” ratings and projecting significant upside potential.

Ongoing regulatory scrutiny

While Microsoft has cleared this hurdle in the United Kingdom, regulatory scrutiny of major AI partnerships continues elsewhere. In the United States, the Federal Trade Commission is actively investigating significant investments in AI companies, including those made by Microsoft, Alphabet, Amazon, and Anthropic.

The global regulatory landscape for AI partnerships remains in flux as authorities worldwide grapple with how to apply existing competition frameworks to rapidly evolving AI technologies and business models.

This decision by the UK regulator may set a precedent for how other jurisdictions approach similar partnerships, potentially easing the path for strategic investments in AI companies without triggering merger investigations—provided that investors maintain influence without exercising outright control.

For Microsoft and OpenAI, the clearance removes a significant cloud of uncertainty that had hung over their partnership since late 2023, allowing both companies to focus on advancing their AI technologies and competing effectively in an increasingly crowded market.