Microsoft, Inflection AI tie-up will not be investigated: EU regulator

Microsoft’s (NASDAQ:MSFT) hiring of Inflection AI employees will not be investigated, the European Union’s antitrust agency said on Wednesday.

The European Commission said seven countries withdrew their initial request to review the deal under Article 22 of the EU Merger Regulation, or EUMR.

“Following the judgment by the Court of Justice of the European Union of 3 September 2024 in the Illumina/GRAIL case, holding that Member States cannot refer a transaction to the Commission under Article 22 of the EUMR when not competent to review the transaction under their national merger control rules, all seven Member States that submitted an initial referral have decided to withdraw their requests,” the agency said in a statement. “Therefore, the Commission will take no decision in this matter.”

The deadline for the Commission to decide on the requests was September 19.

Microsoft shares lost 1% on Wednesday.

The U.K.’s antitrust agency said earlier this month that the Microsoft-Inflection AI partnership did not qualify for an investigation after having launched an inquiry into the agreement in July.

As part of the agreement, Microsoft brought in Inflection AI co-founders Mustafa Suleyman and Karén Simonyan to help lead its consumer artificial intelligence unit, focused on Copilot. Suleyman previously founded DeepMind, which was bought by Google (GOOG) (GOOGL).

It was reported in June that the U.S. Federal Trade Commission was investigating whether the deal between Microsoft and Inflection AI was structured in a way to avoid a government scrutiny.

Microsoft invested multiple billions of dollars into Inflection AI competitor OpenAI at the start of last year amid the artificial intelligence boom.

That deal has attracted scrutiny on both sides of the Atlantic Ocean.