The UK Competition and Markets Authority (CMA) cleared Microsoft’s partnership with Inflection AI following an initial investigation, ruling the pair’s relationship will not impact competition in the country.

The CMA opened a phase one probe into the partnership in July, after Microsoft hired a large numbers of Inflection AI’s workforce, including the start-up’s CEO Mustafa Suleyman who joined as head of its newly-created AI consumer unit. The pair also struck a deal which enabled Microsoft to access Inflection AI’s foundation models.

In a statement, the UK regulator explained Microsoft’s dealing with Inflection AI reflects a “relevant merger situation” under the CMA’s merger control jurisdiction, but added the tie-up “does not give rise to a realistic prospect of substantial lessening of competition”.

Both Microsoft and Inflection AI develop and supply consumer chatbots, and the CMA cited a fear the former would attempt to dampen competition in UK by acquiring the start-up’s “assets”.

However the watchdog concluded that prior to the partnership, Inflection AI “had a very small share of UK domain visits for chatbots and conversational AI tools, and unlike many of its competitors, had not been able to materially increase or sustain its chatbot user numbers”.

The CMA added, therefore, the transaction between the pair does not classify as a “material competitive constraint” on consumer chatbots developed by Microsoft or through the latter’s partnership with OpenAI.

The decision comes a few months after the CMA dropped a probe into Microsoft’s partnership with France-based Mistral. The regulator also opened a phase one investigation into Amazon’s $4 billion investment into Anthropic, which has a deadline of October.