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Antitrust probe into Microsoft and OpenAI ends in the UK

The UK Competition and Markets Authority (CMA) has concluded its investigation into Microsoft’s partnership with OpenAI, deciding not to move forward with a merger probe.

The decision comes after the CMA found that Microsoft does not hold enough control over OpenAI, a key factor in triggering a merger review. The companies’ collaboration began in 2019, when Microsoft invested $1 billion in the AI startup.

Despite this, the CMA stated that Microsoft’s influence had not evolved to the level of de facto control required for further scrutiny.

This marks the end of the UK’s formal investigation into the deal, although the CMA clarified that its decision should not be interpreted as a dismissal of potential competition concerns related to the partnership.

While the investigation is closed, the CMA has been increasingly active in examining major tech company acquisitions, particularly those involving AI startups.

Microsoft welcomed the CMA’s decision, asserting that their ongoing partnership with OpenAI fosters innovation and competition in AI development.

Meanwhile, the CMA continues to monitor the tech sector, with broader powers to investigate companies deemed to hold ‘strategic market status’.

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Scale AI wins Pentagon AI contract

Scale AI has secured a multimillion-dollar contract with the US Department of Defense to develop AI tools for military operations. The project, named Thunderforge, is the Pentagon’s flagship AI initiative aimed at enhancing decision-making, simulation, and operational planning. Led by the Defense Innovation Unit, the programme will see collaboration with technology partners such as Microsoft and Anduril, initially focusing on the Indo-Pacific and European Commands before expanding further.

Thunderforge represents a shift towards AI-driven military strategies, promising increased speed and efficiency in modern warfare. The Department of Defense and Scale AI have emphasised the importance of rapid response times, with the technology designed to process vast amounts of information quickly. However, while Scale AI has assured that human oversight will be maintained, the Defence Innovation Unit has not explicitly highlighted this aspect in its communications.

The deal comes as more AI firms reconsider their stance on military applications. Companies like OpenAI, Microsoft, and Google have altered policies that previously restricted AI development for defence purposes. Critics argue that these technologies could be used for harmful applications despite company assurances, raising ethical concerns about the potential for AI in warfare. Some experts warn that firms may have limited control over how their AI is ultimately deployed.

This latest partnership highlights the growing integration of AI into defence strategies, despite previous pushback from tech industry employees. While firms insist their technologies will be used responsibly, concerns remain over the long-term implications of AI-driven warfare and the ability to ensure its ethical use.

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Northumberland approves Blackstone’s data centre project

Blackstone’s ambitious $13 billion ‘hyperscale’ data centre project in North East England has been given the green light by Northumberland County Council. The plan, which spans 540,000 square metres, was approved after a unanimous vote and is expected to represent an investment of up to £10 billion. The data centre will provide essential data storage and cloud computing services to businesses, addressing the rising demand in sectors such as AI.

The development is expected to generate substantial economic benefits, including up to 1,200 long-term construction jobs and hundreds of operational roles once the centre is running. Additionally, it could support up to 2,700 indirect jobs. As part of the agreement, Blackstone will contribute to a £110 million fund that will help drive growth along the Northumberland Line, a new railway route opened in December 2024.

This development follows the collapse of a previous plan to use the site for a Britishvolt facility, after the UK startup’s failure last year. With demand for data centres escalating, particularly due to AI advancements, this project is poised to play a crucial role in meeting growing technological needs across Europe.

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Nvidia shares drop after US tariffs announcement

Nvidia’s shares plummeted nearly 9% on 3 March following an announcement by US President Donald Trump confirming new tariffs on imports from Canada and Mexico, set to take effect on 4 March. The decline contributed to a broader market downturn, with the Dow Jones falling by 800 points and the Nasdaq dropping by over 3%. Nvidia’s market value took a sharp hit, losing around $265 billion and falling to $2.79 trillion, a steep drop from its previous $3 trillion valuation.

Despite reporting strong earnings, with revenue surging 78% year-over-year to $39.33 billion, Nvidia’s stock has lost 13% since 26 February. The 25% tariffs could affect the company’s operations, particularly as some of its systems are manufactured in the US and Mexico. However, CEO Jensen Huang remains optimistic, highlighting Nvidia’s AI advancements and the upcoming Blackwell chips, which he says will drive strong performance in the next quarter.

Nvidia also plans to play a key role in Taiwan Semiconductor’s $100 billion expansion in the US, a project mentioned by Trump. While the company faces short-term market volatility and policy challenges, its long-term strategy remains focused on technological growth and innovation.

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China to expand AI investment and boost tech innovation

China has announced plans to increase support for AI development and boost venture capital investment as part of its broader strategy to drive technological breakthroughs and self-reliance.

The initiative was outlined in a government report presented at the annual National People’s Congress, highlighting AI, biomanufacturing, quantum technology, and 6G as key areas for future growth.

Authorities plan to encourage the application of large-scale AI models and the advancement of next-generation intelligent terminals and smart manufacturing systems.

The report also emphasised the importance of creating an environment that supports innovation, allowing for exploration and tolerating failure. Young scientists and engineers will be given significant roles in national laboratories to accelerate progress in emerging industries.

China intends to improve its data infrastructure and facilitate cross-border data flows to strengthen its technological capabilities.

The inclusion of AI in the government’s work report for the first time comes amid growing interest in Chinese AI startups such as DeepSeek, signalling Beijing’s intent to remain at the forefront of AI development.

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Amazon bets on AI automation with new business unit

Amazon has created a new division focused on agentic AI to enhance automation for users and businesses. The initiative will be led by AWS executive Swami Sivasubramanian.

WS CEO Matt Garman described agentic AI as a potential multi-billion-dollar business, with the goal of enabling systems to take proactive actions without user prompts.

The announcement follows Amazon’s recent unveiling of an upgraded Alexa, which incorporates similar AI capabilities.

As part of a broader restructuring within AWS, senior vice president Peter DeSantis also outlined leadership changes, including the realignment of AI units Bedrock and SageMaker under the compute organisation.

The company believes these shifts will accelerate innovation and improve customer experience.

Amazon has been investing heavily in AI to maintain its competitive edge in cloud computing and e-commerce. The restructuring signals a stronger push toward AI-driven automation, which the company sees as central to the next wave of technological progress.

Shares of Amazon fell slightly following the announcement, closing at $204.81.

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EU set to implement Entry/Exit System for border control

The European Union has reached an agreement to finally implement the long-awaited Entry/Exit System (EES), which will modernise border checks for short-stay travellers.

After several delays due to technical issues and a lack of readiness, the system is now set to begin operations in autumn, though a specific launch date has yet to be determined.

Member states will have the option to introduce the system all at once or in phases over a six-month transition period, with the full implementation to be completed by the end of the transition.

The EES, which was first proposed in 2016, aims to replace traditional passport stamping by collecting biometric data from non-EU visitors, including photos and fingerprints.

This data will be recorded each time visitors enter or exit the Schengen Area. The system is designed to improve border control, help authorities identify overstayers, and prevent identity fraud.

While Cyprus and Ireland will not participate in the new system, all other EU member states and four Schengen-associated countries will be involved.

Poland, which currently holds the EU Council’s rotating presidency, will lead negotiations with the European Parliament to finalise the law.

Tomasz Siemoniak, Poland’s Minister for Internal Affairs, indicated that a final agreement should be reached smoothly, with October set as the target for full implementation.

The EES is expected to provide authorities with new tools to enhance security and better manage borders within the Schengen Area.

For more information on these topics, visit diplomacy.edu.

South Korea launches $34 billion fund for strategic industries

South Korea has announced the creation of a $34 billion policy fund to support companies in key industries such as semiconductors, automotive, and advanced technologies, in response to growing global competition and protectionist policies.

The state-run Korea Development Bank will manage the fund by providing low-interest loans and other financial support over the next five years to businesses involved in national strategic industries.

The government stressed that maintaining competitiveness in these strategic sectors has become crucial to the country’s economic security, particularly amid the uncertainties caused by the new US administration.

South Korea has identified 12 industries, including semiconductors, AI, and biopharmaceuticals, as critical for its future economic stability and will offer targeted financial support to strengthen these sectors.

In addition to the fund, South Korea also unveiled new policies to attract skilled global talent in cutting-edge fields. These measures include offering top-tier visas and permanent residency to professionals with experience at major international firms, aiming to enhance the country’s workforce in strategic industries.

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Musk’s bid to halt OpenAI’s for-profit transition rejected

A US court has denied Elon Musk’s request for a preliminary injunction against OpenAI’s transition into a for-profit organisation.

US District Judge Yvonne Gonzalez Rogers ruled that Musk did not meet the high standards required to block the move. However, the judge indicated that she would expedite a trial on the matter, which is expected to take place later this year.

Musk, who co-founded OpenAI in 2015 but left before its major success, argued that OpenAI had initially sought his charitable funding to create AI for the public good, but has since shifted its focus towards making profits.

His lawyer, Marc Toberoff, expressed satisfaction that the judge had agreed to a swift trial, claiming that the case involves urgent public interest concerns.

OpenAI, which is seeking to become a for-profit entity to attract the necessary capital for its AI projects, welcomed the court’s decision.

The company emphasised that its goal is to develop advanced AI models to benefit society. Musk’s legal action, which also includes antitrust claims, stems from his frustration with OpenAI’s shift in direction since he departed from the organisation.

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Nvidia and Broadcom test Intel’s advanced chip manufacturing

Nvidia and Broadcom are conducting manufacturing tests with Intel’s advanced 18A chip-making process, signalling potential confidence in the struggling company’s technology.

Sources indicate that the tests, though preliminary, could lead to major contracts worth hundreds of millions of dollars. Advanced Micro Devices (AMD) is also evaluating Intel’s capabilities, though it is unclear if it has sent test chips for validation.

Despite the interest, Intel’s foundry business has faced repeated delays, with its 18A process now pushed back another six months due to challenges in qualifying essential intellectual property.

The company has struggled to secure major external clients, with most of its foundry revenue still coming from its own chip production.

The US government sees Intel as critical to restoring domestic semiconductor manufacturing and has explored deals to strengthen its position, including potential partnerships with TSMC.

Intel has signed agreements with Microsoft and Amazon for chip production, though details remain vague. Industry experts suggest that many chip designers are waiting to see if Intel can reliably deliver on its foundry promises before committing to large-scale production.

Financial setbacks have placed additional pressure on Intel, with its foundry revenue declining 60% last year and break-even projections now delayed until at least 2027.

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