British regulators have launched an initial investigation into Microsoft's recruitment of crucial staff from an AI startup due to concerns that it may impede competition in the rapidly growing artificial intelligence market. The Competition and Markets Authority (CMA) announced on Tuesday that it has found "sufficient information" during its review of the hirings from Inflection AI, which includes CEO Mustafa Suleyman, to warrant an investigation. Earlier this year, Microsoft hired Suleyman to lead its consumer artificial intelligence division alongside bringing on board a number of top engineers and researchers. Suleyman, a co-founder of the AI research lab DeepMind (now a subsidiary of Google), is highly regarded within the AI industry. The CMA is now evaluating whether these hirings amount to a merger that would lead to a significant reduction in competition within the UK's AI market, thus violating the country's antitrust regulations. Microsoft responded in a statement, expressing confidence that the recruitment of talent fosters competition and should not be treated as a merger. The company also pledged to provide the CMA with the necessary information to expedite its inquiries. The CMA has until September 11 to determine whether it will grant approval or escalate the investigation into a more in-depth inquiry.

The authority holds the power to undo deals or impose remedies to address competition concerns. Both US and UK regulators have shown increasing concerns about major tech companies absorbing the talent and assets of innovative AI startups without formally acquiring them. Last week, three US Senators called on antitrust enforcers at the Department of Justice and the Federal Trade Commission to investigate Amazon's acquisition of Adept, a San Francisco-based AI firm. The deal involves Adept's CEO and key employees joining Amazon, granting the e-commerce giant a license to Adept's AI systems and datasets.