Microsoft’s hire of start-up staff probed as possible merger

Inflection AI specialises in so-called generative AI – where media such as text and images can be created by computers trained on vast libraries of existing data.

The hype around the tech and the language models underpinning it has spurred several big deals between tech giants and smaller developers.

Chief among them is Microsoft’s multi-billion dollar backing of OpenAI, which enabled it to bring popular chatbot ChatGPT to its search engine Bing.

Other firms, including Google and Meta, have likewise embedded generative AI products such as chatbots and image generators across their services to try and capitalise on investor and consumer interest in the technology.

And the reliance of tech firms on powerful hardware to provide these buzzy, energy-intensive services has seen firms like Nvidia soar to new heights of market value and prominence.

The CMA previously hinted at its “real concerns” over big tech’s AI dominance and the risk of larger firms leveraging their resourced to control access to AI hardware and products in April.

Its chief executive Sarah Cardell said in a speech the watchdog had identified an “interconnected web” of AI partnerships involving Google, Apple, Microsoft, Meta and Amazon.

“Without fair, open, and effective competition and strong consumer protection, underpinned by these principles, we see a real risk that the full potential of organisations or individuals to use AI to innovate and disrupt will not be realised, nor its benefits shared widely across society,” she said.