The Competition and Markets Authority said that Microsoft hasn’t acquired the ability to “materially influence” Mistral’s commercial policy and the CMA has closed the case. 

Britain’s deals watchdog announced last month that it was gathering information on the tie-up to see if it threatened competition in the nation. It also opened initial probes into Microsoft’s deal with Inflection AI and Amazon.com Inc.’s Anthropic investment. 

Microsoft’s partnership with OpenAI Inc. is also in the midst of an initial investigation by the agency. That tie-up is set to avoid European scrutiny with regulators not seeing the need for a formal investigation as its falls short of the definition of a takeover.

Microsoft welcomed Friday’s decision and said that investment and partnership are essential to new players in the AI economy.

The CMA is taking a close look at the investment of Big Tech firms into AI startups after an investigation found an “interconnected web” of partnerships and investments within the nascent industry which could allow them to shape the market and cause competition concerns.

It signaled that it would use its powers under merger control rules to decide whether some of these deals could fall under UK scrutiny, noting that some partnerships aren’t structured like a traditional deal. 

“It’s nice to see the CMA has realized this was a real reach,” said Camilla de Coverly Veale, Policy Director at the Startup Coalition. “This is precisely why considering good and bad in AI partnerships more generally before diving in would be better for an ecosystem that wants less uncertainty.”