Microsoft’s hiring of certain former employees from artificial intelligence startup Inflection has been referred for an initial merger investigation in the U.K.

Britain’s Competition and Markets Authority (CMA) said Tuesday that the hiring of Mustafa Suleyman, Inflection’s co-founder, along with most of the startup’s staff, should be assessed to decide whether it constitutes a merger under U.K. rules and therefore could result in less competition within the AI sector.

If it finds reason to investigate further, the CMA can refer the case for an in-depth investigation, known as a “Phase 2” probe. The CMA said it would announce a decision on whether to refer the case for a Phase 2 investigation by Sept. 11.

Microsoft announced in March it had hired Suleyman from Inflection, along with a number of other key employees at the firm.

Suleyman was appointed Microsoft’s executive vice president and CEO of Microsoft AI, a newly formed unit of the company focused on its AI products, including Copilot, the company’s AI assistant which it integrated into its Windows and Microsoft 365 software.

In addition to Suleyman’s senior executive appointment, the Washington-based tech giant selected Karen Simonyan to join the firm as its chief scientist, reporting to Suleyman.

Both Suleyman and Simonyan were former employees of DeepMind, the Google-owned AI lab.

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