IBM’s Acquisition of HashiCorp Investigated by UK Competition Authority
Summary
HashiCorp provides hybrid and multi-cloud lifecycle management products, such as infrastructure as code tool Terraform, which facilitate building and running AI applications. Conversely, HashiCorp’s stock rose by 4% after suffering considerable declines in 2023 brought on by relicensing Terraform from open-source Apache 2.0 to the more restrictive Business Source License. The executives allegedly stood to gain substantial personal benefits from the deal, such as certain “golden parachutes” and converting their large, illiquid stock holdings into cash. In October 2023, telecoms regulator Ofcom identified various issues in the U.K. cloud market that present challenges for businesses and consumers, including Amazon and Microsoft’s dominance. The CMA found that the merger has the potential to substantially lessen competition in the chip design and light simulation market but may still approve it if the two companies submit acceptable mitigations.
