With global regulators examining Microsoft Corp’s $13 billion investment in OpenAI, the software giant has a simple argument it hopes will resonate with antitrust officials: It doesn’t own a traditional stake in the buzzy startup so can’t be said to control it.

When Microsoft negotiated an additional $10 billion investment in OpenAI in January, it opted for an unusual arrangement, people familiar with the matter said at the time.

Rather than buy a chunk of the cutting-edge artificial intelligence lab, it cut a deal to receive almost half of OpenAI’s financial returns until the investment is repaid up to a pre-determined cap, one of the people said. The unorthodox structure was concocted because OpenAI is a capped for-profit company housed inside a non-profit organization.

It’s not clear regulators see a distinction, however. On Friday the UK Competition and Markets Authority said it was gathering information from stakeholders to determine whether the collaboration between the two firms threatens competition in the UK, home of Google’s AI research lab Deepmind. The US Federal Trade Commission is also examining the nature of Microsoft’s investment in OpenAI and whether it may violate antitrust laws, according to a person familiar with the matter.

The inquiries are preliminary and the agency hasn’t opened a formal investigation, according to the person, who asked not to be named discussing a confidential matter.

Microsoft didn’t report the transaction to the agency because the investment in OpenAI doesn’t amount to control of the company under US law, the person said. OpenAI is a non-profit and acquisitions of non-corporate entities aren’t reported under US merger law, regardless of value. Agency officials are analyzing the situation and assessing what its options are.

“While details of our agreement remain confidential, it is important to note that Microsoft does not own any portion of OpenAI and is simply entitled to a share of profit distributions,” a Microsoft spokesperson said in a statement. Earlier Friday, Microsoft President Brad Smith said “the only thing that has changed is that Microsoft will now have a non-voting observer on OpenAI’s board.” He described its relationship with OpenAI as “very different” from Google’s outright acquisition of DeepMind in the UK.

“Our partnership with Microsoft empowers us to pursue our research and develop safe and beneficial AI tools for everyone, while remaining independent and operating competitively. Their non-voting board observer does not provide them with governing authority or control over OpenAI’s operations,” said an OpenAI spokesperson in a statement.

From the beginning, Microsoft and OpenAI took pains to telegraph the two companies’ independence. Microsoft hoped to reassure investors and customers that it’s not overly reliant on one partner. OpenAI didn’t want employees, customers and other investors thinking it was merely an outpost of Redmond, Washington-based Microsoft. That careful positioning was upended last month with the firing of OpenAI Chief Executive Officer Sam Altman and the startup’s near implosion.

The Altman imbroglio demonstrated both Microsoft’s lack of control and its influence. Microsoft received just minutes notice that the OpenAI board planned to announce Altman’s ouster, and its executives were not consulted in the decision. Still Microsoft CEO Satya Nadella played a key role, along with other investors, in forcing the board to reverse its decision. At one point Microsoft said it would hire Altman and his OpenAI colleagues to form a new Microsoft AI unit.

Once Altman was restored as CEO, Microsoft executives debated the wisdom of taking a seat on the OpenAI board, people familiar with the matter said at the time. On the one hand, executives feared that a board seat or observer slot might draw the attention of regulators. On the other hand, Microsoft wanted to keep a closer eye on its partner and protect its investment-an imperative that carried the day, despite the risks.

Ultimately, Microsoft could face a world of regulatory headaches. Regulators in Europe are also paying attention, according to a spokesperson for the European Commission. In order for a transaction to be notifiable to the Commission under the EU Merger Regulation, it has to involve a change of control on a lasting basis. While this transaction has not been formally notified, the Commission had been following the situation even before the management turmoil, the spokesperson said.

Last month, Germany’s competition authority said it wasn’t subjecting Microsoft’s OpenAI investment to a merger review. But the regulator said they would hold off only because OpenAI didn’t have substantial business in Germany. After reviewing the transaction and talking the companies, the regulator found the investment would give Microsoft a “material competitive influence” over the AI company that might warrant scrutiny in the future if OpenAI increases its activities in Germany.

The partnership raises competition issues if Microsoft cuts back on its own AI research and development or if the investment keeps OpenAI from partnering with the tech giant’s rivals, said Bloomberg Intelligence antitrust analyst Jennifer Rie. Antitrust enforcers may also have concerns about Microsoft’s board observer since it would give Microsoft additional information on OpenAI’s plans even if it doesn’t have rights to influence the decisions.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

The central anti-terror agency raided 40 locations in Maharashtra this morning and arrested 13 people in connection with an ISIS terror module case. National Investigating Agency also raided another place in Karnataka in the case.

The 40 different places being raided in Maharashtra include Thane, Pune, Mira Bhayandar, sources said. Most of these places are in Thane Rural (31) and Thane city (9), right next to Mumbai. In Pune, two places are being raided and one in Mira Bhayandar, they added.

A suspect – Aakif Ateeque Nachan – allegedly involved in making explosives was arrested last August, the sixth accused to be ever arrested in an ISIS terror module case.

Five others — Tabish Nasser Siddiqui from Mumbai, Zubair Noor Mohammed Shaikh alias Abu Nusaiba and Adnan Sarkar from Pune, and Sharjeel Shaikh and Zulfikar Ali Barodawala from Thane — were arrested by the agency last month.

Assam Chief Minister Himanta Biswa Sarma has hit back at lawyer Kapil Sibal for saying Assam was part of Myanmar during a hearing in the Supreme Court.

Mr Sibal reportedly made the comment on Wednesday during a hearing on petitions challenging the validity of Section 6A of the Citizenship Act, 1955.

“Those who have no knowledge of Assam’s history should not speak. Assam was never a part of Myanmar. There were clashes for a brief period. That was the only relation. Otherwise, I have not seen any data which stated that Assam was a part of Myanmar,” Mr Sarma told reporters.

The war of words between Mr Sarma, known as the BJP’s strategist for the northeast, and Mr Sibal, a Rajya Sabha MP who left the Congress in May 2022, also comes amid the crisis in Manipur where the issue of illegal immigrants from Myanmar is a huge factor in the violence.

Many leaders including Home Minister Amit Shah and Foreign Minister S Jaishankar have said entry of illegal immigrants is also one of the main factors behind the unrest in the northeast state.

During the Supreme Court proceedings on Wednesday, Mr Sibal had said no migration can ever be mapped.

“And if you look at the history of Assam, you will realise that it is impossible to figure out who came when. Assam originally was a part of Myanmar. And it was way back in 1824 after the British conquered a part of the territory that a treaty was entered into by which Assam was handed over to the British,” Mr Sibal said.

“You can imagine the kind of movements of people that must have taken place in the context of the then British empire. And if you jump to 1905, you have the partition of Bengal,” said Mr Sibal, who is also the lawyer of some members of the Kuki tribes in Manipur, following the hill-majority Kukis’ ethnic clashes with the valley-majority Meiteis.

Any mention of Myanmar in sensitive public discourse has turned extremely emotive after what happened in Manipur. The Kuki tribes, who share kinship ties with tribes in Myanmar’s Chin State and Mizoram, want a separate administration carved out of Manipur. Neighbouring state Mizoram, too, has been backing the demands of the Kukis in Manipur.

Mizoram’s new Chief Minister Lalduhoma on Wednesday said he will meet Mr Shah and Mr Jaishankar in Delhi soon to discuss the issues of refugees from Myanmar and Bangladesh, and displaced Kuki tribes from Manipur who have taken shelter in Mizoram.

During campaigning on November 4, Lalduhoma told NDTV it is their “dream” to see all Mizo people under a single administrative unit. “As the saying goes, blood is thicker than water. The people from Manipur as well as Myanmar, they are our kith and kin, our flesh and blood. They are our brothers and sisters. We can’t betray them when they are in a difficult situation… And regarding Zo unification or Greater Mizoram, whatever you call it, we all are behind this. It is the dream of the Mizos that a day will come when all the Mizo people divided due to the British’s policy of divide and rule will be under a single administrative unit. That day will come one day. This is our dream. We are looking forward. This is not a private property of the MNF alone. It is a dream of all the Mizos.”

Mizoram has taken in over 35,000 refugees from the junta-ruled Myanmar, where the military forces are fighting ethnic insurgent groups and pro-democracy rebels.