The Hire That Was a Merger — Inflection, September 4, No SLC

March 19, 2024. Microsoft announced it had hired several former Inflection employees, which the CMA later understood amounted to almost all of Inflection's team, including co-founders Mustafa Suleyman and Karén Simonyan. Microsoft also entered into a series of arrangements including a non-exclusive licensing deal to utilise Inflection IP. The CMA calls the various arrangements the Transaction. I will keep Transaction as their noun. I will not invent the dollar inside the redactions. Reuters walked about $650 million. I will keep about. I will not freeze 650 as a wire.

April 24, 2024: invitation to comment. July 16, 2024: launch of merger inquiry. September 4, 2024: clearance announced. October 24, 2024: full text decision published. I am lining those dates so a grocery line cannot call September a vibe. A comment period is a door. A launch is a door. A clearance is a later door that says two things at once.

The CMA found that the Transaction is a relevant merger situation falling within UK merger control jurisdiction, but that it does not give rise to a realistic prospect of a substantial lessening of competition as a result of horizontal unilateral effects. Two sentences. One September. I am putting relevant merger situation next to no SLC so a grocery line cannot spend clearance as if the hire were not a merger, and cannot spend merger as if the hire were a crime. Jurisdiction can find a merger. A finding of a merger can still clear. Two enterprises ceased to be distinct, in the summary I walked, because Microsoft had substantively acquired Inflection's pre-Transaction foundation-model and chatbot development capabilities — the core team plus access to IP, which enabled the former Inflection team to continue the pre-Transaction roadmap inside Microsoft. Ceased to be distinct is a statute's cousin. A cousin is not a kit.

Inflection was founded March 2022 by Suleyman, Simonyan, and board member Reid Hoffman, as an AI-first consumer products company, in that decision's weather. Chatbot: Pi. Inflection was not a strong competitor to Microsoft's consumer chatbots — Copilot, and ChatGPT in partnership with OpenAI — in the clearance weather. A small portion of UK visits. Could not significantly grow or maintain chatbot users, in that telling. I will keep the mouth of the decision. I will not upgrade small to a joke I tell at the fourteenth hole.

Osric wrote Mar 19 announce / relevant merger / no SLC / Sept 4 clear / ~$650M Reuters / ceased to be distinct / Pi not Copilot and boxed no SLC. He laminated a coupon that had used the word partnership. He said partnership is a brochure. I said partnership is what the announcement called a Transaction the CMA later named.

Sibley asked if ceased-to-be-distinct was a stain that spread. I said it was a jurisdiction sentence. She said sentences are for people. I said this sentence is two enterprises. She wiped the nine. I did not write SLC on the pouch. Writing SLC on a pouch is a kit.

The Enterprise That Was a Team

Section 23 of the Enterprise Act 2002, in the decision I walked: a relevant merger situation arises when (i) two or more enterprises cease to be distinct, (ii) either the UK turnover test or the share of supply test is met, and (iii) in the case of a completed merger, the reference is made not more than four months from the later of the merger taking place or material facts being notified. Three chairs. One statute. I will keep the chairs as chairs. I will not typeset a notification you can file.

The CMA's guidance, as the summary walked it: there is no particular combination of assets that constitutes an enterprise; it may include a group of employees and their know-how where this enables a particular business activity to be continued. I am putting employees-and-know-how on the sideboard so a grocery line cannot call a hire a vibe one lawyer invented. A guidance can name a team. A guidance is a public. A public is not a kit.

On that basis, the CMA believes Microsoft substantively acquired Inflection's pre-Transaction foundation-model and chatbot development capabilities. The combination of the core team together with access to Inflection IP was key to the value of the Transaction, as it enabled the former Inflection team to continue the pre-Transaction Inflection roadmap for consumer-facing AI product development within Microsoft. At least part of the activities of pre-Transaction Inflection has been brought under the control of Microsoft. Two enterprises have ceased to be distinct. I will keep substantively acquired as the CMA's verb. I will keep key to the value. I will not invent the dollar inside the redactions.

March 2024 arrangements, in the full text I walked: (a) offers of employment to Inflection employees by Microsoft, including Suleyman as CEO of Microsoft AI and Simonyan as Chief Scientist of Microsoft AI — the Relevant Employees, in the decision's noun; (b) a Non-Exclusive Intellectual Property License, in exchange for a redacted USD, providing Microsoft a license to Inflection's IP as at the date of the agreement; (c) a Waiver and Release Agreement, in exchange for a redacted USD, under which Inflection and its equity holders agreed to waive any claims against Microsoft with respect to the solicitation and hiring of the Relevant Employees. Three papers. One March. I will not invent the redactions. I will say a waiver can sit next to a license and a hire, and that sitting is a public, and that a public is not a how-to.

The turnover test was not met. Inflection's UK turnover did not satisfy the threshold in section 23(1)(b). The share of supply test was. Based on SimilarWeb data for web visits by domain for chatbots in February 2024 in the UK, the CMA considers that Microsoft and the Target Enterprise's share of supply is above 25 percent, with an increment of a redacted 0–5 percent. I will keep above 25. I will keep February 2024. I will keep SimilarWeb. I will not freeze an increment I cannot see. Microsoft submitted that the relevant employees have no attributable share of supply because they do not own, control, or offer chatbots, and that Inflection retains the unrestricted right to develop and license Pi, and that none of the associated agreements purported to transfer the Pi service, users, or their associated data to Microsoft, nor is there any plan to migrate or transition Pi users. The CMA treated those submissions as going more to the reliability of the data for calculating a precise increment than to whether the test was met, in the weather I walked. I will keep Microsoft's mouth next to the CMA's 25. Two mouths. One test. The test was met. The turnover test was not. I am putting both so a grocery line cannot call September a vibe about money I remade from another book.

For the purposes of this Decision, the CMA has treated Microsoft and OpenAI as having ceased to be distinct enterprises, on the basis that Microsoft's initial investment in 2019 conferred on it the ability to materially influence OpenAI's policy. I am putting that sentence in this chapter as the CMA's treatment for this decision, not as another book's 10-Q. A treatment can name a 2019. A 10-Q is a different kitchen. I will not remake the $13 billion. I will say a decision can treat two names as one for a share-of-supply chair, and that treating is a public, and that a public is not a finding I will typeset as a purchase.

Tully sells maps in a rack that still has a weight. I bought a UK map I did not need because a share of supply is a geography and a kitchen table still wants a paper. She asked if I was traveling. I said I was dating a 25 percent. She said percents are for milk. I said this percent is a February visit. She dated the receipt. Weights are honest. Migrations are a mouth the CMA did not spend as a transfer.

Osric wrote s23 EA 2002 / employees+know-how / 3 papers: hire + non-excl IP + waiver / turnover NOT / share of supply YES / SimilarWeb Feb 2024 / >25% / increment redacted / MSFT+OAI treated distinct-ceased for THIS decision / 2019 material influence and boxed THIS. He laminated a flyer that had used the word control. He said control is a brochure until a decision writes it. I said control is in brought under the control and not in a kit. He dated the pad.

The Chatbot That Was Not a Constraint

Inflection AI, Inc., founded March 2022 by CEO Mustafa Suleyman, Chief Scientist Karén Simonyan, and board member Reid Hoffman, as an AI-first consumer products company, in the decision's own weather. Suleyman's blog, March 8, 2022, sat in a footnote. I will keep the footnote. I will not invent Hoffman's other boards as a finding of conflict. A name can sit in a decision. A name is a public. A public is not a personality I will sell.

Microsoft Corporation: founded 1975, Redmond, NASDAQ. Turnover in 2023 approximately USD 211,915 million worldwide, and a redacted million in the UK. I will keep 211,915 as the decision's number. I will not remake another book's Azure commitment as this turnover. A turnover is a chair. A 10-Q is a kitchen I already refused.

Pi was released in May 2023 and is based on Inflection's foundation model, the most recent version of which was Inflection 2.5. Inflection's objective was to create a personal AI for everyone. Pi was designed as a companion: conversations, friendly advice, concise information in a natural, flowing style. Promoted as not just smart, but having good EQ. Intended as a teacher, coach, confidante, creative partner, and sounding board. IQ capabilities included general accuracy, coding, and mathematics. Inflection benchmarked itself against OpenAI when it released Inflection 2.5. I will keep the list as the decision's list. I will not upgrade EQ to a joke I tell at the fourteenth hole. I will not typeset a companion you can ship.

Theory of Harm 1: horizontal unilateral effects arising from the loss of competition in the development and supply of consumer chatbots. The CMA found that prior to the Transaction, Inflection 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. Despite Pi having broadly comparable general intelligence and accuracy capabilities to many of its competitors at the time of the Transaction, and being differentiated by its focus on emotional intelligence, it is not a material competitive constraint on Copilot, or ChatGPT in partnership with OpenAI, or other competitors. Those competitors did not regard Inflection's capabilities with regard to EQ or other product innovation as a material constraint, in that telling. No realistic prospect of an SLC on that theory.

Theory of Harm 2: horizontal unilateral effects arising from the loss of competition in the development and supply of foundation models. No realistic prospect of an SLC on that theory either. Two theories. Two noes. One September 4. I am lining both so a grocery line cannot spend clearance as if the CMA had only looked at a chatbot, or only looked at a model. Two rooms. One decision.

Following the Transaction, Inflection announced Inflection 2.5 would be made available to third parties via APIs and licensing partnerships, including on Microsoft Azure, in the decision's post-transaction weather. I will keep including on Microsoft Azure as a CMA sentence. I will not remake another book's $250 billion as this API. An API can sit in a decision. A 10-Q is still a different kitchen.

The CMA also noted Microsoft acquired compute clusters; the acquisition of those clusters was not necessary to the conclusion that Microsoft acquired an enterprise. I am putting not necessary on the sideboard so a grocery line cannot call a rack the merger. A rack can sit in a Transaction. A rack is not the jurisdiction sentence. The jurisdiction sentence is two enterprises and a team and an IP.

Vern sells tea in a tin that still has a lid. I bought a tin I did not need because a decision still wants a cup and Osric still writes no SLC as if the words might fade. He asked if I was hosting. I said I was dating a theory of harm. He said theories are for school. I said this theory is two noes. He dated the receipt. Lids are honest. Halos are a later costume.

Sibley asked if EQ was a stain that did not count. I said it was a differentiation the CMA named and then did not spend as a constraint. She said stains count. I said this stain is a companion. She wiped the nine.

Royce asked whether "not a constraint" meant "Pi was bad." I said bad is a polo word. He said then why hire the team. I said the team is the jurisdiction sentence. He took a cart.

Perrin asked whether "ceased to be distinct" meant her API vendor had merged with a model. I said no, and that a diner is not a SimilarWeb visit, and that I would not be her Osric. She paid for the coffee.

I will not give you a Transaction you can copy. I will not give you a waiver you can draft. I will tell you March 19 happened, that April 24 invited comment, that July 16 launched, that September 4 found a merger and no SLC, that October 24 published the full text, that employees-and-know-how sat in a guidance, that three papers sat in a March, that turnover failed and share of supply passed on February visits, that Microsoft and OpenAI were treated as ceased-to-be-distinct for this decision's chair, that two theories both found no SLC, that Pi is a May 2023 companion, that Azure sat in a post-transaction API sentence I will not remake as a 10-Q, and that a diner in a state I will not trailer is not those rooms. The next room is a 700-million clause. The hire is still this one.

The Four Months and the Users Who Did Not Move

Section 23's third chair, already named: in a completed merger, the reference is made not more than four months from the later of the merger taking place or material facts being notified. I am lighting four months because a grocery line will spend March 19 as if July 16 were a vibe, and spend July 16 as if September 4 were a raid. A comment period opened April 24. A launch sat on July 16. A clearance sat on September 4. A full text sat on October 24. Four doors. One statute's cousin. I will not typeset a notification you can file. I will say a clock can be a public, and that a public is not a kit.

Microsoft submitted, in the decision I already walked, that none of the associated agreements purported to transfer the Pi service, users, or their associated data to Microsoft, nor is there any plan to migrate or transition Pi users. I am lighting the users a second time because Chapter 9's Settings path will try to spend a user as a toggle, and Chapter 8's Data API will try to spend a user as a thread. Three users. Three kitchens. I will not add them. A Pi user can stay at Inflection in a submission. A Settings user can turn off an extension. A Reddit user can sit in a disclosure. Labels are honest when they stay labels.

Inflection, after the Transaction, announced Inflection 2.5 would be available to third parties via APIs, including on Microsoft Azure, in the decision's post-transaction weather I already named. I am lighting Azure a second time so I can refuse it a second time. I will not remake another book's $250 billion. An API can sit in a CMA sentence. A 10-Q is a different kitchen. Two lightings. One refusal.

Compute clusters, already walked: acquired; not necessary to the conclusion that Microsoft acquired an enterprise. I am putting not-necessary next to four months so a grocery line cannot call a rack the clock. A rack can sit in a Transaction. A clock is a statute's cousin. The jurisdiction sentence is still two enterprises and a team and an IP.

Osric wrote s23 four months / Apr 24 comment / Jul 16 launch / Sept 4 clear / Oct 24 text / Pi users not transferred in MSFT mouth / Azure API post ≠ 10-Q / clusters not necessary and boxed not transferred. He laminated a flyer that had used the word migrate. He said migrate is a brochure. I said migrate is a submission the CMA did not spend as a transfer. He dated the pad.

Sibley asked if four months was a stain that had a deadline. I said it was a chair. She said chairs are for people. I said this chair is a statute. She wiped the nine.

Royce asked whether "users stayed" meant "they didn't get the customers." I said customers is a polo word. He said then why the team. I said the team is the jurisdiction sentence. He took a cart.

Perrin asked whether "Pi" meant her chatbot had moved. I said I would not invent her chatbot, and that a diner is not a SimilarWeb visit. She paid for the coffee.

I will not give you a Transaction you can copy. I will not give you a notification you can file. I will tell you four months sat in a chair, that Pi users were not transferred in a submission, that an Azure API sat in a post-transaction sentence I will not remake as a 10-Q, that clusters were not necessary to the enterprise finding, and that a diner is not those rooms. The next room is still a 700-million clause. The hire is still this one.

Perrin asked whether "the British thing" meant her API was a merger. I said no. She said then why the chapter. I said because a hire can be a merger a later kitchen copies without the decision. She paid for the coffee.

Royce asked whether "cleared" meant "they can do it again." I said again is a polo word. He said then why September. I said September is a door that stayed open with a sign on it. He took a cart.

I will not give you a Transaction you can copy. I will tell you March 19 happened, that July 16 launched, that September 4 found a merger and no SLC, that $650 million is a walk, that ceased-to-be-distinct is the jurisdiction sentence, and that a diner in a state I will not trailer is not those rooms. The next room is a 700-million clause. The hire is this one.