The Competition and Markets Authority (CMA), the UK antitrust regulator, has launched a formal investigation into the partnership between Amazon.com, Inc. and the AI startup Anthropic PBC.
This comes after Amazon recently invested $4 billion in Anthropic, a company known for developing large language models and the chatbot Claude, akin to OpenAI’s ChatGPT.
The investigation, part of the CMA’s probe of major tech companies’ investments in AI startups, seeks to determine whether this partnership could harm competition in the UK market.
The regulator has set the initial period for its investigation to begin on August 9, 2024, with a decision deadline of October 4, 2024.
“The Competition and Markets Authority (CMA) hereby gives notice pursuant to paragraph (b) of the definition of ‘initial period’ in section 34ZA(3) of the Enterprise Act 2002 (the Act) that it has sufficient information in relation to the partnership between Amazon.com, Inc. and Anthropic PBC (the Partnership) to enable it to begin an investigation for the purposes of deciding whether to make a reference for a phase 2 investigation.
The initial period defined in section 34ZA(3) of the Act in relation to the Partnership will therefore commence on the first working day after the date of this notice, ie on 9 August 2024. The end of the initial period and the deadline for the CMA to announce its decision whether to refer the Merger for a Phase 2 investigation is therefore 4 October 2024.”
The announcement comes shortly after the CMA invited comments on Google’s financial ties with Anthropic, following Google’s investments totalling $2.3 billion over the past year.
Founded in 2021, Anthropic has quickly raised $10 billion, becoming a public benefit corporation to differentiate from competitors.
The CMA’s investigation points to the issue some refer to as a “quasi-merger” strategy by Big Tech firms. This approach involves investments or hiring talent from innovative startups, aiming to exert control without triggering full merger regulatory investigation.
The CMA is also preparing to examine Microsoft’s investments in OpenAI and its partnership with French startup Mistral AI, although the latter was deemed too small for a full probe.
In response to the investigation, an Anthropic spokesperson said the company is independent, noting that Amazon does not hold any board seats or observer rights. Anthropic intends to cooperate fully with the CMA to clarify the nature of its collaboration with Amazon.
The CMA now has 40 working days to decide whether the Amazon-Anthropic partnership warrants further investigation. This decision could lead to more strict antitrust measures if the regulator deems the investment could impact market competition.
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