As the tech world closely observes the integration of top executives and AI engineering talent from OpenAI into Microsoft, questions arise regarding the role of competition regulators in the visible migration of expertise and value to Microsoft's commercial empire.

Recent reports suggest that OpenAI's attempt to reinstate CEO Sam Altman following his removal has failed, with Altman opting to join Microsoft. President Greg Brockman and several leading AI engineers are also making the move to Microsoft, where Altman will head a new AI research division. The move indicates Microsoft's intention to establish its own version of OpenAI within its organization.

Furthermore, there is a possibility of a mass exodus of OpenAI staff to Microsoft, as hundreds of employees have signed a letter expressing their potential departure unless the board reinstates Altman and Brockman and appoints two new independent directors. The letter highlights Microsoft's assurance of providing positions for all OpenAI employees at the new subsidiary.

Amid these significant upheavals, Microsoft's leadership attempts to maintain a facade of business as usual. CEO Satya Nadella's public statement emphasizes the company's commitment to its partnership with OpenAI and its confidence in the product roadmap. While investors may find reassurance in Nadella's message, competition regulators may perceive it as an attempt to downplay Microsoft's control over the AI landscape.

Microsoft's cautious approach in its investment in OpenAI, where it holds a minority stake worth several billion dollars, has likely allowed the company to avoid triggering formal competition reviews. By keeping its ownership below 49 percent and refraining from seeking a board seat, Microsoft has flown under the radar of merger control regulations.

However, concerns regarding AI monopolies are growing. With only a few major players in the market, including Microsoft, the establishment and consolidation of AI dominance raises alarm. The question arises as to where competition regulators are in addressing this issue.

According to Cristina Caffarra, a leading competition economist, regulators may have limited avenues for reviewing the situation. She states that the acquisition of senior executives does not constitute the purchase of a going concern or an asset, significantly narrowing the opportunities for formal investigation by regulators. However, if Microsoft were to join OpenAI's board, that could trigger a change of control and subsequently prompt scrutiny.

Microsoft's dominance in cloud computing positions the company to gain a lead in the AI field by leveraging its training infrastructure. This extension of market power into a new area warrants attention from competition regulators concerned about tech firms using their market position to establish dominance.

Currently, Germany's Federal Cartel Office (FCO) has determined that Microsoft's involvement with OpenAI does not require merger control. However, the FCO has indicated that increased influence by Microsoft in the future could trigger a reevaluation. The FCO is currently assessing Microsoft's market power beyond the OpenAI cooperation as part of Germany's digital competition law.

On a broader scale, the European Union has implemented the Digital Markets Act (DMA) that designates certain companies as "gatekeepers." While Microsoft holds this status due to its Windows OS, cloud services are not yet subject to DMA regulations. Experts express skepticism that the DMA will keep pace with rapidly evolving developments and question whether the Commission has the inclination to intervene in the ongoing power dynamics between Microsoft and OpenAI.

In conclusion, as Microsoft's acquisition of OpenAI progresses, the involvement of competition regulators remains unclear. While existing tools and rules may not be fully equipped to address the integration of AI talent, the potential consequences of this consolidation of power cannot be ignored. As the AI landscape continues to evolve, regulators may need to develop new strategies to ensure fair competition within the industry.