LONDON (AP) — British regulators opened a preliminary investigation on Tuesday into Microsoft's hiring of an AI startup's key staff over concerns that it could thwart competition in the booming artificial intelligence market.
The Competition and Markets Authority said 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 artificial intelligence 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 U.K.'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 Sept. 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 startups without formally acquiring them.
Three members of the U.S. Senate wrote last week to antitrust enforcers at the Justice Department and the Federal Trade Commission, urging them to investigate Amazon's deal with San Francisco-based Adept. The deal will result in Adept's CEO and key employees going to Amazon and giving the e-commerce giant a license to Adept’s AI systems and datasets.
The senators noted that the FTC is already looking into the Microsoft-Inflection deal and described it as “alarmingly similar to the one between Amazon and Adept, and it effectively eliminated a major competitor to OpenAI.”
FILE - Mustafa Suleyman co founder and CEO of Inflection AI speaks to journalist during the AI Safety Summit in Bletchley Park, Milton Keynes, England, on Nov. 1, 2023. The Competition and Markets Authority said Tuesday, July 16, 2024 that its review of the hirings from Inflection AI turned up “sufficient information” to open an investigation. Microsoft hired Inflection's co-founder and CEO Mustafa Suleyman to head up its consumer artificial intelligence business, along with several top engineers and researchers. (AP Photo/Alastair Grant)
TOKYO (AP) — Asian shares mostly rose Friday as markets continued to be moderately optimistic about the prospects of technology companies and the relative health of global economies.
Japan’s benchmark Nikkei 225 added 0.7% to reach 38,647.75 after data on the world’s fourth largest economy came in mostly positive.
Industrial production rose 2.8% in July from the previous month, a rebound from minus 4.2% in June, according to Ministry of Economy, Trade and Industry. That was weaker than what the market had expected, but a sign of growth. In other findings, the unemployment rate rose to 2.7% in July, up from 2.5% in June.
Tokyo consumer prices rose more than expected to 2.6% year on year in August, up from 2.2% in July, as prices of food and utilities surged. That’s almost certain to catch the attention of the Bank of Japan as it mulls when to raise interest rates, a move that’s expected later this year or early next year.
Australia’s S&P/ASX 200 gained 0.6% to 8,091.90. South Korea’s Kospi added 0.8% to 2,682.81. Hong Kong’s Hang Seng surged 1.6% to 18,073.68, while the Shanghai Composite rose 0.7% to 2,843.68.
On Wall Street, a late-afternoon slide by some Big Tech companies cut into earlier gains Thursday, leading to a mixed finish for U.S. stock indexes.
The S&P 500 ended flat after giving up an earlier gain of nearly 1%. The benchmark index is about 1.3% away from its record set in July.
The Dow Jones Industrial Average managed a 0.6% gain, enough for its third all-time high since Monday. The Nasdaq composite, which is heavily weighted with technology stocks, slipped 0.2%. It had been up 1.3% in the early going.
Despite the mixed finish, gainers outnumbered decliners by roughly two to one on the New York Stock Exchange.
Nvidia, which has ridden the frenzy over artificial intelligence to become one of the S&P 500’s most influential companies, was the biggest weight on the market. Its shares fell 6.4% despite stellar results for the second quarter. The stock, with a total market value topping $3 trillion, is still up 138% in 2024.
In a bit of positive news, the Commerce Department upgraded its assessment of U.S. economic growth for the second quarter to 3%, compared to a previous estimate of 2.8%. It’s another signal that the economy remains strong, despite pressure from stubborn inflation and high interest rates.
The mostly solid earnings and economic growth updates are capping off a month of encouraging reports for the broader economy. Data from various reports in August have shown that retail sales, employment and consumer confidence remain strong.
“Solid growth of consumer spending propelled the economy forward in the second quarter, and the increase of consumer confidence in July suggests it will propel growth in the second half of the year as well,” said Bill Adams, chief economist for Comerica Bank.
The key report this week comes on Friday, when the U.S. government releases its July data on inflation with the PCE, or personal consumption and expenditures report. Economists expect the PCE, which is the Federal Reserve’s preferred measure of inflation, to show that inflation edged up to 2.6% in July from 2.5% in June. It was as high as 7.1% in the middle of 2022.
Hopes are growing for the Federal Reserve to start cutting its benchmark interest rate. Traders expect the first cut to happen at the next meeting in September. The market is betting that the Fed will cut its benchmark rate by 1% by the end of the year.
Bond yields rose in the Treasury market. The yield on the 10-year Treasury rose to 3.86% from 3.84% late Wednesday.
All told, the S&P 500 lost 0.22 points to 5,591.96. The Dow gained 243.63 points to 41,335.05. The Nasdaq fell 39.60 points to 17,516.43.
In energy trading, benchmark U.S. crude gained 35 cents to $76.26 a barrel. Brent crude, the international standard, rose 39 cents to $80.33 a barrel.
In currency trading, the U.S. dollar rose to 145.06 Japanese yen from 145.02 yen. The euro cost $1.1083, up from $1.1082.
AP Business Writers Damian J. Troise and Alex Veiga contributed. Yuri Kageyama is on X: https://x.com/yurikageyama
Currency traders work near a screen showing the Korea Composite Stock Price Index (KOSPI) at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Friday, Aug. 30, 2024. (AP Photo/Ahn Young-joon)
Currency traders watch monitors near a screen showing the Korea Composite Stock Price Index (KOSPI) at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Friday, Aug. 30, 2024. (AP Photo/Ahn Young-joon)
Currency traders watch monitors near a screen showing the Korea Composite Stock Price Index (KOSPI), top left, at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Friday, Aug. 30, 2024. (AP Photo/Ahn Young-joon)
