The Competition and Markets Authority (CMA) has launched a formal investigation into whether major AI companies — including Google, Microsoft, and OpenAI — are engaging in anti-competitive practices that could harm British businesses and consumers.

The probe, announced on Tuesday, will examine whether dominant AI platforms are leveraging their market position to squeeze out smaller UK competitors and whether exclusive cloud-computing partnerships create unfair barriers to entry.

CMA chief executive Sarah Cardell said the investigation was "essential" to ensure the AI market developed in a way that benefited everyone: "We cannot allow the extraordinary economic potential of AI to be captured by a handful of mega-corporations. Competition drives innovation, and innovation benefits us all."

The announcement was welcomed by British AI startups, many of whom have complained for years about the difficulty of competing against the vast compute and data advantages held by US tech giants.

Google and Microsoft both issued statements saying they welcomed regulatory scrutiny and were committed to operating in compliance with UK competition law. OpenAI did not immediately respond to requests for comment.

The CMA has set a preliminary findings deadline of Q1 2027, with potential remedies ranging from structural separation of services to mandatory data-sharing requirements.