LONDON — Britain’s top competition regulator on Wednesday moved to block Microsoft‘s acquisition of video game publisher Activision Blizzard.
The measure marks a major blow for the U.S. tech giant, as it seeks to convince authorities that the deal will benefit competition. Microsoft said it plans to appeal the decision.
Shares of Activision Blizzard slumped more than 8% in early U.S. trading. Microsoft shares were up 7% but this was largely linked to the company’s strong earnings report Tuesday.
The U.K. Competition and Markets Authority said it opposed the deal as it raises competition concerns in the nascent cloud gaming market. The CMA previously held concerns about competition in games consoles being undermined but ruled out this concern in a preliminary decision in March.
Microsoft could make Activision’s games exclusive to its cloud gaming platform, Xbox Game Pass, cutting off distribution to other key industry players, the CMA said.
Cloud gaming is a technology that enables gamers to access games via companies’ remote servers — effectively streaming a game like you would a movie on Netflix. The technology is still in its infancy, but Microsoft is betting big on it becoming a mainstream way of playing games.
“Allowing Microsoft to take such a strong position in the cloud gaming market just as it begins to grow rapidly would risk undermining the innovation that is crucial to the development of these opportunities,” the CMA said in a press release Wednesday.
Microsoft offered the CMA remedies in an attempt to resolve its concerns — including “requirements governing what games must be offered by Microsoft to what platforms and on what conditions over a ten-year period.” However, the regulator rejected the proposals.
“Given the remedy applies only to a defined set of Activision games, which can be streamed only in a defined set of cloud gaming services, provided they are purchased in a defined set of online stores, there are significant risks of disagreement and conflict between Microsoft and cloud gaming service providers, particularly over a ten-year period in a rapidly changing market,” the CMA said.
‘Flawed understanding of this market’
Microsoft Vice Chair and President Brad Smith said in a statement that the company remains “fully committed to this acquisition and will appeal.”
“The CMA’s decision rejects a pragmatic path to address competition concerns and discourages technology innovation and investment in the United Kingdom,” Smith said Wednesday.
“We have already signed contracts to make Activision Blizzard’s popular games available on 150 million more devices, and we remain committed to reinforcing these agreements through regulatory remedies. We’re especially disappointed that after lengthy deliberations, this decision appears to reflect a flawed understanding of this market and the way the relevant cloud technology actually works.”
Bobby Kotick, CEO of Activision Blizzard, told employees in a letter Wednesday that the company and Microsoft have “already begun the work to appeal to the UK Competition Appeals Tribunal.”
“We’re confident in our case because the facts are on our side: this deal is good for competition,” he said.
“At a time when the fields of machine learning and artificial intelligence are thriving, we know the U.K. market would benefit from Microsoft’s bench strength in both domains, as well as our ability to put those technologies to use immediately,” Kotick added. “By contrast, if the CMA’s decision holds, it would stifle investment, competition, and job creation throughout the UK gaming industry.”
An Activision Blizzard spokesperson said the CMA’s decision represented “a disservice to UK citizens, who face increasingly dire economic prospects.”
“We will reassess our growth plans for the UK. Global innovators large and small will take note that – despite all its rhetoric — the UK is clearly closed for business,” the spokesperson said.
Executives at the Redmond, Washington-based technology giant believe the acquisition will boost its efforts in gaming by adding lucrative franchises like Call of Duty and Candy Crush Saga to its content offerings.
Sony, in particular, has voiced concern with Microsoft’s Activision purchase. The Japanese gaming giant fears that Microsoft could make Call of Duty exclusive to its Xbox consoles in the long run.
Microsoft sought to allay those concerns by offering Sony, Nintendo, Nvidia and other firms 10-year agreements to continue bringing Call of Duty to their respective gaming platforms.
Microsoft contends it wouldn’t be financially beneficial to withhold Call of Duty from PlayStation, Nintendo and other rivals given the licensing income it generates from keeping the game available on their platforms.
Microsoft’s Smith told CNBC last month that the company is offering Sony the same agreement as it did Nintendo — to make Call of Duty available on PlayStation at the same time as on Xbox, with the same features. Sony still opposes the deal.
The CMA had raised concerns with the potential for Microsoft to hinder competition in the nascent cloud gaming market via its Xbox Game Pass subscription service, which offers cloud gaming among its perks. Microsoft has committed to bring new Call of Duty titles to Xbox Game Pass on day one of its release.
Cloud gaming, or the ability to access games via PC or mobile devices over the internet, is still in its infancy and requires a strong broadband connection to work well. Cloud gaming made up only a fraction of global internet traffic in 2022.
Microsoft still needs to convince other regulators not to block the deal. The EU continues to probe the merger to assess whether it hurts competition, while the U.S. Federal Trade Commission has sued to block the deal on antitrust grounds.
A vehicle Tesla is using for robotaxi testing purposes on Oltorf Street in Austin, Texas, US, on Sunday, June 22, 2025.
Tim Goessman | Bloomberg | Getty Images
In an earnings call this week, Tesla CEO Elon Musk teased an expansion of his company’s fledgling robotaxi service to the San Francisco Bay Area and other U.S. markets.
But California regulators are making clear that Tesla is not authorized to carry passengers on public roads in autonomous vehicles and would require a human driver in control at all times.
“Tesla is not allowed to test or transport the public (paid or unpaid) in an AV with or without a driver,” the California Public Utilities Commission told CNBC in an email on Friday. “Tesla is allowed to transport the public (paid or unpaid) in a non-AV, which, of course, would have a driver.”
In other words, Tesla’s service in the state will have to be more taxi than robot.
Tesla has what’s known in California as a charter-party carrier permit, which allows it to run a private car service with human drivers, similar to limousine companies or sightseeing services.
The commission said it received a notification from Tesla on Thursday that the company plans to “extend operations” under its permit to “offer service to friends and family of employees and to select members of the public,” across much of the Bay Area.
But under Tesla’s permit, that service can only be with non-AVs, the CPUC said.
The California Department of Motor Vehicles told CNBC that Tesla has had a “drivered testing permit” since 2014, allowing the company to operate AVs with a safety driver present, but not to collect fees. The safety drivers must be Tesla employees, contractors or designees of the manufacturer under that permit, the DMV said.
In Austin, Texas, Tesla is currently testing out a robotaxi service, using its Model Y SUVs equipped with the company’s latest automated driving software and hardware. The limited service operates during daylight hours and in good weather, on roads with a speed limit of 40 miles per hour.
Robotaxis in Austin are remotely supervised by Tesla employees, and include a human safety supervisor in the front passenger seat. The service is now limited to invited users, who agree to the terms of Tesla’s “early access program.”
On Friday, Business Insider, citing an internal Tesla memo, reported that Tesla told staff it planned to expand its robotaxi service to the San Francisco Bay Area this weekend. Tesla didn’t respond to a request for comment on that report.
In a separate matter in California, the DMV has accused Tesla of misleading consumers about the capabilities of its driver assistance systems, previously marketed under the names Autopilot and Full Self-Driving (or FSD).
Tesla now calls its premium driver assistance features, “FSD Supervised.” In owners manuals, Tesla says Autopilot and FSD Supervised are “hands on” systems, requiring a driver at the wheel, ready to steer or brake at all times.
But in user-generated videos shared by Tesla on X, the company shows customers using FSD hands-free while engaged in other tasks. The DMV is arguing that Tesla’s license to sell vehicles in California should be suspended, with arguments ongoing through Friday at the state’s Office of Administrative Hearings in Oakland.
Under California state law, autonomous taxi services are regulated at the state level. Some city and county officials said on Friday that they were out of the loop regarding a potential Tesla service in the state.
Stephanie Moulton-Peters, a member of the Marin County Board of Supervisors, said in a phone interview that she had not heard from Tesla about its plans. She urged the company to be more transparent.
“I certainly expect they will tell us and I think it’s a good business practice to do that,” she said.
Moulton-Peters said she was undecided on robotaxis generally and wasn’t sure how Marin County, located north of San Francisco, would react to Tesla’s service.
“The news of change coming always has mixed results in the community,” she said.
Brian Colbert, another member of the Marin County Board of Supervisors, said in an interview that he’s open to the idea of Tesla’s service being a good thing but that he was disappointed in the lack of communication.
“They should have done a better job about informing the community about the launch,” he said.
Alphabet’s Waymo, which is far ahead of Tesla in the robotaxi market, obtained a number of permits from the DMV and CPUC before starting its driverless ride-hailing service in the state.
Waymo was granted a CPUC driverless deployment permit in 2023, allowing it to charge for rides in the state. The company has been seeking amendments to both its DMV and CPUC driverless deployment permits as it expands its service territory in the state.
Meta CEO Mark Zuckerberg makes a keynote speech during the Meta Connect annual event, at the company’s headquarters in Menlo Park, California, on Sept. 25, 2024.
Manuel Orbegozo | Reuters
Meta CEO Mark Zuckerberg on Friday said Shengjia Zhao, the co-creator of OpenAI’s ChatGPT, will serve as the chief scientist of Meta Superintelligence Labs.
Zuckerberg has been on a multibillion-dollar artificial intelligence hiring blitz in recent weeks, highlighted by a $14 billion investment in Scale AI. In June, Zuckerberg announced a new organization called Meta Superintelligence Labs that’s made up of top AI researchers and engineers.
Zhao’s name was listed among other new hires in the June memo, but Zuckerberg said Friday that Zhao co-founded the lab and “has been our lead scientist from day one.” Zhao will work directly with Zuckerberg and Alexandr Wang, the former CEO of Scale AI who is acting as Meta’s chief AI officer.
“Shengjia has already pioneered several breakthroughs including a new scaling paradigm and distinguished himself as a leader in the field,” Zuckerberg wrote in a social media post. “I’m looking forward to working closely with him to advance his scientific vision.”
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In addition to co-creating ChatGPT, Zhao helped build OpenAI’s GPT-4, mini models, 4.1 and o3, and he previously led synthetic data at OpenAI, according to Zuckerberg’s June memo.
Meta Superintelligence Labs will be where employees work on foundation models such as the open-source Llama family of AI models, products and Fundamental Artificial Intelligence Research projects.
The social media company will invest “hundreds of billions of dollars” into AI compute infrastructure, Zuckerberg said earlier this month.
“The next few years are going to be very exciting!” Zuckerberg wrote Friday.
Alex Karp, CEO of Palantir Technologies, speaks on a panel titled Power, Purpose, and the New American Century at the Hill and Valley Forum at the U.S. Capitol on April 30, 2025 in Washington, DC.
Kevin Dietsch | Getty Images
Palantir has hit another major milestone in its meteoric stock rise. It’s now one of the 20 most valuable U.S. companies.
The provider of software and data analytics technology to defense agencies saw its stock rise more than 2% on Friday to another record, lifting the company’s market cap to $375 billion, which puts it ahead of Home Depot and Procter & Gamble. The company’s market value was already higher than Bank of America and Coca-Cola.
Palantir has more than doubled in value this year as investors ramp up bets on the company’s artificial intelligence business and closer ties to the U.S. government. Since its founding in 2003 by Peter Thiel, CEO Alex Karp and others, the company has steadily accrued a growing list of customers.
Revenue in Palantir’s U.S. government business increased 45% to $373 million in its most recent quarter, while total sales rose 39% to $884 million. The company next reports results on Aug. 4.
Buying the stock at these levels requires investors to pay hefty multiples. Palantir currently trades for 273 times forward earnings, according to FactSet. The only other company in the top 20 with a triple-digit ratio is Tesla at 175.
With $3.1 billion in total revenue over the past year, Palantir is a fraction the size of the next smallest company by sales among the top 20 by market cap. Mastercard, which is valued at $518 billion, is closest with sales over the past four quarters of roughly $29 billion.