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Microsoft (MSFT) & OpenAI Face Scrutiny by UK Watchdog CMA
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Microsoft's (MSFT - Free Report) multibillion-dollar partnership with ChatGPT maker OpenAI is being examined by the U.K.'s Competition and Markets Authority ("CMA") and the U.S. Federal Trade Commission ("FTC").
The CMA has initiated an information-gathering process as a precursor to a formal investigation that is likely to begin next year. The FTC is also reportedly looking into Microsoft's investment in OpenAI, although no formal investigation has been launched yet.
The investigation is focused on whether the partnership between Microsoft and OpenAI, including recent developments, has resulted in a relevant merger situation. The CMA has become a significant obstacle to Big Tech's dealmaking and antitrust enforcers in Brussels and Washington are also closely monitoring developments in the artificial intelligence (AI) market.
The CMA has invited comments from the involved parties, including Microsoft and OpenAI, as well as "any interested party" like competitors and customers. The deadline for comments is Jan 3, 2024.
MSFT and OpenAI have stated that their partnership empowers the latter to pursue research and develop safe AI tools independently.
Microsoft contends that its partnership with OpenAI has preserved the independence of both entities and has fostered innovation and competition in the AI space. The company emphasizes that the only change is the addition of a non-voting observer position on OpenAI's board.
The CMA will conduct an information-gathering process to determine whether it has jurisdiction to review the deal, considering factors such as the size of the investment, influence on decision-making and a change in control. Microsoft's recent involvement in OpenAI's boardroom changes has attracted regulatory attention and the investigation will unfold over the coming months.
Microsoft recently tangled with both the FTC and CMA on its $69 billion acquisition of Call of Duty videogame maker Activision Blizzard over antitrust concerns. The CMA had blocked the Activision deal earlier in the year but later changed its mind after MSFT amended its acquisition plan.
Microsoft Leads the Race for AI Revenues Through OpenAI
Microsoft's investment of up to $13 billion for a 49% stake in OpenAI’s for-profit arm has made it the largest backer of the AI company. The deal initially granted the company certain exclusive rights to commercialize OpenAI's technology for corporate clients. In return, OpenAI gained access to MSFT's vast cloud computing resources, which are crucial for developing advanced generative AI systems.
While the two companies have not fully disclosed the details of their alliance, they have integrated OpenAI's AI technology into various Microsoft products throughout the year. MSFT's investment has allowed OpenAI to compete in the AI market by providing access to large-scale computing power.
This Zacks Rank #3 (Hold) company continues to make strong efforts to boost its generative AI capabilities. Its integration of GPT-4 into its search engine Bing and browser Edge to deliver a ChatGPT-like experience to users remains noteworthy. Microsoft Azure offers the Azure OpenAI Service, which enables the seamless application of LLM and generative AI techniques in various use cases. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Microsoft recently announced OpenAI's DALL-E 3 AI image-synthesis model, fully integrated with ChatGPT, which challenges previous models by rendering images with complex descriptions and handling in-image text generation.
Microsoft’s strong generative AI efforts pose a competitive threat to companies like Alphabet (GOOGL - Free Report) , Meta Platforms (META - Free Report) and Amazon (AMZN - Free Report) . Last week, Alphabet’s Google introduced its new, advanced and powerful large language model ("LLM"), namely Gemini.
Google has powered its Bard chatbot and Search Generative Experience with Gemini Pro. Gemini Nano is likely to turn out to be very useful for Android developers. Pixel 8 Pro models will include Gemini Nano features.
In collaboration with Microsoft, Meta unveiled the next generation of Llama, called Llama 2. The social media giant also released Code Llama, an LLM that can use text prompts to generate and discuss code. Amazon Web Services recently announced the general availability of its fully managed service called Amazon Bedrock. It provides seamless access to high-performing foundation models from AI companies through an API.
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Microsoft (MSFT) & OpenAI Face Scrutiny by UK Watchdog CMA
Microsoft's (MSFT - Free Report) multibillion-dollar partnership with ChatGPT maker OpenAI is being examined by the U.K.'s Competition and Markets Authority ("CMA") and the U.S. Federal Trade Commission ("FTC").
The CMA has initiated an information-gathering process as a precursor to a formal investigation that is likely to begin next year. The FTC is also reportedly looking into Microsoft's investment in OpenAI, although no formal investigation has been launched yet.
The investigation is focused on whether the partnership between Microsoft and OpenAI, including recent developments, has resulted in a relevant merger situation. The CMA has become a significant obstacle to Big Tech's dealmaking and antitrust enforcers in Brussels and Washington are also closely monitoring developments in the artificial intelligence (AI) market.
The CMA has invited comments from the involved parties, including Microsoft and OpenAI, as well as "any interested party" like competitors and customers. The deadline for comments is Jan 3, 2024.
MSFT and OpenAI have stated that their partnership empowers the latter to pursue research and develop safe AI tools independently.
Microsoft contends that its partnership with OpenAI has preserved the independence of both entities and has fostered innovation and competition in the AI space. The company emphasizes that the only change is the addition of a non-voting observer position on OpenAI's board.
The CMA will conduct an information-gathering process to determine whether it has jurisdiction to review the deal, considering factors such as the size of the investment, influence on decision-making and a change in control. Microsoft's recent involvement in OpenAI's boardroom changes has attracted regulatory attention and the investigation will unfold over the coming months.
Microsoft recently tangled with both the FTC and CMA on its $69 billion acquisition of Call of Duty videogame maker Activision Blizzard over antitrust concerns. The CMA had blocked the Activision deal earlier in the year but later changed its mind after MSFT amended its acquisition plan.
Microsoft Corporation Price and Consensus
Microsoft Corporation price-consensus-chart | Microsoft Corporation Quote
Microsoft Leads the Race for AI Revenues Through OpenAI
Microsoft's investment of up to $13 billion for a 49% stake in OpenAI’s for-profit arm has made it the largest backer of the AI company. The deal initially granted the company certain exclusive rights to commercialize OpenAI's technology for corporate clients. In return, OpenAI gained access to MSFT's vast cloud computing resources, which are crucial for developing advanced generative AI systems.
While the two companies have not fully disclosed the details of their alliance, they have integrated OpenAI's AI technology into various Microsoft products throughout the year. MSFT's investment has allowed OpenAI to compete in the AI market by providing access to large-scale computing power.
This Zacks Rank #3 (Hold) company continues to make strong efforts to boost its generative AI capabilities. Its integration of GPT-4 into its search engine Bing and browser Edge to deliver a ChatGPT-like experience to users remains noteworthy. Microsoft Azure offers the Azure OpenAI Service, which enables the seamless application of LLM and generative AI techniques in various use cases. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Microsoft recently announced OpenAI's DALL-E 3 AI image-synthesis model, fully integrated with ChatGPT, which challenges previous models by rendering images with complex descriptions and handling in-image text generation.
Microsoft’s strong generative AI efforts pose a competitive threat to companies like Alphabet (GOOGL - Free Report) , Meta Platforms (META - Free Report) and Amazon (AMZN - Free Report) . Last week, Alphabet’s Google introduced its new, advanced and powerful large language model ("LLM"), namely Gemini.
Google has powered its Bard chatbot and Search Generative Experience with Gemini Pro. Gemini Nano is likely to turn out to be very useful for Android developers. Pixel 8 Pro models will include Gemini Nano features.
In collaboration with Microsoft, Meta unveiled the next generation of Llama, called Llama 2. The social media giant also released Code Llama, an LLM that can use text prompts to generate and discuss code. Amazon Web Services recently announced the general availability of its fully managed service called Amazon Bedrock. It provides seamless access to high-performing foundation models from AI companies through an API.