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Microsoft escapes CMA investigation over Mistral AI partnership

The CMA, now investigating several prominent collaborations between big tech firms and AI startups, said that Microsoft’s Mistral AI tie-up did not merit further scrutiny.

By Greg Noone

The Competition and Markets Authority has terminated its investigation into the partnership between Microsoft and Mistral AI. Initiated last month, the UK regulator’s probe was to assess if the software giant’s collaboration with the French AI startup equated to a ‘relevant merger situation’ that might reduce marketplace competition. This was not the case, said the CMA in an abrupt statement. 

“The CMA has decided,” said the watchdog, “that Microsoft Corporation’s partnership with Mistral AI does not qualify for investigation under the merger provisions of the Enterprise Act 2002.” Its wider probe into the substantive links between big tech firms and other AI startups is ongoing. 

Mistral AI's logo on a billboard in Jakarta, Indonesia.
(Photo by Shutterstock)

Microsoft agreed generous deal with Mistral AI in February

Agreed in February, Microsoft’s partnership with Mistral AI not only saw it invest $16m into the French startup, but also opened up access to the former’s supercomputing infrastructure as well and allowed its models to appear on Redmond’s Azure platform. The deal was preceded by the integration of Mistral’s 7B model into Azure’s model catalogue. News that the CMA did not consider the deal as a shadow takeover of the up-and-coming French AI company was welcomed by Microsoft. 

“Investment and partnership are essential to new players in the AI economy,” a company spokesperson told Reuters. “We welcome the CMA’s determination that our fractional investment and partnership with Mistral AI does not qualify as a merger or acquisition.” Mistral AI did not respond to a request for comment from Tech Monitor

A screenshot of the CMA homepage.
The CMA has previously expressed concerns about big tech partnerships with AI startups up and down the field’s value chain. (Photo by Shutterstock)

CMA wary about “interconnected web” of partnerships

The CMA has been combative recently about what it sees as an attempt by a select few big tech companies to dominate research and development in AI by dominating or buying out promising startups. In a speech last month, the watchdog’s chief executive Sarah Cardell said that an “interconnected web” of 90 investments and partnerships existed up and down the AI value chain, one that was dominated by just six large firms: Google, Microsoft, Meta, Apple, Nvidia and Microsoft. 

Such companies, said Cardell, “already hold positions of market power in many of today’s most important digital markets [and] could profoundly shape these new markets to the detriment of fair, open and effective competition, ultimately harming businesses and consumers.”

A few weeks later, the CMA published a call for views on its investigation into these partnerships. One of the alliances under scrutiny was that between Amazon and Anthropic, which has seen the former pump $4bn in funding into the latter, in addition to providing it with extensive computing capacity through its cloud computing arm, AWS. 

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“It’s unprecedented for the CMA to review a collaboration of this type,” said Amazon, in a statement. “Our collaboration with Anthropic includes a limited investment, doesn’t give Amazon a board director or observer role, and continues to have Anthropic running its models on multiple cloud providers.”

Read more: France wants to become Europe’s capital for AI

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