The UK’s competition watchdog is to look at whether Microsoft’s high-value partnership with OpenAI could be considered as a merger.

The Competition and Markets Authority is examining whether the US tech giant’s work with OpenAI could affect the AI market overall.

Microsoft, which owns 49% of OpenAI, said it had “preserved independence” for both firms.

But the relationship has come under focus after recent upheaval at OpenAI.

Last month, OpenAI, which is best known as the creator of ChatGPT, was plunged into chaos when its boss Sam Altman was suddenly fired.

After Mr Altman’s sacking, Microsoft then offered him a job leading a new advanced AI research team, before he was reinstated at OpenAI following an appeal from employees.

During the drama, a spotlight was cast on how commercial competition is shaping the development of AI systems and the pace at which the technology is moving.

It caused confusion about the future of the start-up, while Microsoft chief executive Satya Nadella had said previously that governance at the firm needed to change.

The CMA said that it was asking for comments, partly “in light of these developments”.

The watchdog is questioning whether the partnership has resulted in an “acquisition of control”, whether an effective merger has taken place and if this could affect competition in the UK.

It has asked third parties for their comments on the tie-up and could launch a probe if it feels it is necessary.

Sorcha O’Carroll, senior director for mergers at the CMA, said: “The invitation to comment is the first part of the CMA’s information gathering process and comes in advance of launching any phase 1 investigation, which would only happen once the CMA has received the information it needs from the partnership parties.”