The UK's antitrust regulator, the Competition and Markets Authority (CMA), has launched an investigation into IBM's planned acquisition of cloud software vendor HashiCorp, citing concerns over potential competition implications. The probe, announced on Monday, marks a significant development in the $6.4 billion deal, which was first announced in April.

The CMA is inviting comments from interested parties by January 16 and has set a provisional deadline of February 25 to decide whether to clear the deal or refer it for further review. The investigation is a crucial step in determining whether the acquisition would stifle competition in the cloud software market, which is increasingly dominated by a few major players.

HashiCorp, founded in 2012 by Mitchell Hashimoto and Armon Dadgar, provides tools to help manage cloud infrastructure and security. The San Francisco-based company has built a roster of around 4,400 customers, which would significantly expand IBM's presence in the cloud and AI markets. The acquisition is seen as a strategic move by IBM to bolster its position in the rapidly growing cloud computing space.

The CMA's investigation is not the only hurdle facing the deal. The US Federal Trade Commission (FTC) is also reviewing the acquisition, which has sparked concerns over the potential concentration of power in the cloud software market. The dual investigations highlight the scrutiny that large tech deals are facing in the current regulatory environment.

The outcome of the CMA's investigation will have significant implications for the cloud software market. If the deal is cleared, it would give IBM a significant boost in its efforts to compete with cloud giants like Amazon Web Services, Microsoft Azure, and Google Cloud Platform. However, if the deal is blocked or subject to significant conditions, it could limit IBM's ability to expand its cloud offerings and potentially alter the competitive landscape of the market.

The investigation also raises broader questions about the role of antitrust regulators in the tech industry. As the cloud computing market continues to consolidate, regulators are facing increasing pressure to ensure that deals do not stifle competition and innovation. The CMA's probe into the IBM-HashiCorp deal will be closely watched by industry observers and could have far-reaching implications for the future of tech M&A.