Microsoft’s Hiring from AI Startup Inflection Triggers UK Merger Probe

The UK's Competition and Markets Authority (CMA) has initiated a preliminary merger investigation into Microsoft’s recent hiring of key staff from AI startup Inflection. This move, announced on Tuesday, comes after Microsoft recruited Mustafa Suleyman, co-founder of Inflection, along with a significant portion of the startup’s workforce. The CMA aims to determine whether this hiring spree qualifies as a merger under UK regulations, potentially leading to reduced competition in the AI sector.

If preliminary findings warrant, the CMA may escalate the matter to an in-depth “Phase 2” investigation. A decision on whether to proceed to Phase 2 will be announced by September 11.

In March, Microsoft revealed its acquisition of Suleyman, who now serves as the executive vice president and CEO of Microsoft AI. This newly established unit focuses on advancing AI technologies, including the integration of Copilot, an AI assistant, into Windows and Microsoft 365.

Alongside Suleyman, Karen Simonyan has also joined Microsoft as chief scientist, reporting directly to Suleyman. Both Suleyman and Simonyan previously worked at DeepMind, the AI lab owned by Google.