08:03 AM EDT, 07/16/2024 (MT Newswires) -- UK regulators said Tuesday they are launching a preliminary investigation of Microsoft's ( MSFT ) licensing deal with AI startup Inflection.

Reuters reported in March that Microsoft ( MSFT ) agreed to pay $650 million to Inflection in a licensing deal that included the hiring of top Inflection employees.

The UK's Competition and Markets Authority said the probe will determine if the agreement qualifies as a merger and "whether to make a reference for a phase 2 investigation."

The authority said it will decide to refer the matter for further investigation by Sept. 11.