Microsoft faces UK competition investigation over hiring of AI start-up's founder and key staff

Microsoft's hiring of employees from artificial intelligence (AI) start-up Inflection will undergo an intitial investigation by British authorities over concerns that it could thwart competition in the booming AI market.

The UK's Competition and Markets Authority said on Tuesday its review of the hirings from Inflection AI, including its co-founder and CEO Mustafa Suleyman, turned up "sufficient information" to open an investigation.

Microsoft hired Suleyman to head up its consumer AI business earlier this year, and brought over several top engineers and researchers.

Suleyman co-founded the AI research lab DeepMind, which is now owned by Google, before setting up Inflection and is considered an influential figure in the AI world.

The watchdog has indicated that it was assessing whether the hirings amount to a merger that results in "a substantial lessening of competition" in the UK's AI market, in breach of the country's antitrust rules.

"We are confident that the hiring of talent promotes competition and should not be treated as a merger," Microsoft said in a statement.

"We will provide the UK Competition and Markets Authority with the information it needs to complete its inquiries expeditiously".

The British watchdog has until September 11 to decide whether to give its approval or escalate the probe into an in-depth investigation. The authority has the power to reverse deals or impose fixes to address competition concerns.

Authorities on both sides of the Atlantic have become concerned about how the biggest technology companies are gobbling up the talent and products of innovative AI start-ups without formally acquiring them.

Three members of the US Senate wrote last week to antitrust enforcers at the Justice Department and