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Microsoft's partnership with AI startup Mistral avoids probe by UK's CMA

Microsoft mistrial ai

The United Kingdom’s Competition and Markets Authority has found that Microsoft’s partnership with AI startup Mistral does not qualify for investigation under the merger provisions of the Enterprise Act 2002. The decision will come as a relief to the two companies, which now won’t be bogged down dealing with the regulator.

According to a CMA spokesperson who spoke to CNBC, the CMA did not believe that the partnership gave Microsoft “material influence” over Mistral. Responding, a Microsoft spokesman said:

Investment and partnership are essential to new players in the AI economy. We welcome the CMA’s determination that our fractional investment and partnership with Mistral AI does not qualify as a merger or acquisition.

Under the deal, Mistral was awarded $16 million from Microsoft. In exchange, Microsoft was given a minority stake in Mistral and was able to add its large language model to its Azure cloud computing platform.

For those who don’t know, a large language model is something like GPT, which understands and can answer queries. One notable aspect of Mistral is that it’s a European company rather than US-based, like ChatGPT, Google Gemini, and so on.

It is worth noting that the CMA is also doing investigations into an Amazon-Inflection deal, an Amazon-Anthropic deal, a deal between Microsoft and OpenAI, and Microsoft’s hiring of ex-employees from Inflection.

We should hear more about the CMA’s views on each of these deals sometime in the future. It will have to look at each agreement closely to see how much power Microsoft and Amazon are gaining from the respective deals.

The Competition and Markets Authority came to prominence over the last few years when it stymied Microsoft’s attempt to acquire Activision Blizzard for a while. Eventually, it allowed the deal to go ahead. Regulators all around the world are starting to scrutinise big tech more closely.

Source: CMA via CNBC

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