The UK’s Competition and Markets Authority (CMA) has initiated a formal investigation into the partnership between Amazon and the artificial intelligence research firm Anthropic, raising concerns about a potential de facto merger.
This investigation, which began on August 8, 2024, is part of a broader inquiry into the competitive impacts of strategic partnerships in the AI sector, particularly involving The Big tech companies.
The UK’s Competition and Markets Authority (CMA) has begun a phase 1 investigation into Amazon’s $4 billion investment in Anthropic and their exclusivity agreements, examining whether this partnership is anticompetitive and could limit competition in AI and cloud computing. The CMA will decide by October 4, 2024, whether to advance to a more detailed phase 2 investigation.
The investigation centers on concerns that Amazon’s minority ownership in Anthropic, combined with exclusivity agreements, could unfairly confine Anthropic’s AI technologies to Amazon’s ecosystem. Regulators are assessing whether this setup, though not a traditional merger, might effectively stifle competition and violate UK antitrust laws.
Large tech giants, such as Microsoft, Amazon, and Google, have a history of purchasing smaller businesses, particularly in the AI space. Google made major acquisitions of Fitbit and DeepMind, even though authorities eventually approved these agreements because they saw them as acquisitions of rival companies.
The alliances between Microsoft and OpenAI and Amazon and Anthropic are not normal buyouts. Anthropic and OpenAI are pioneering firms in generative AI because they have the same goal of creating AI systems that function at the human level.
Regulators are wondering if Amazon and Microsoft’s strategic alliances, like their $4 billion investment in Anthropic and Microsoft’s $13 billion investment in OpenAI, could still result in anti-competitive behavior by restricting access to critical AI technologies, even though these companies haven’t fully acquired these AI firms.
Microsoft even considers OpenAI a competitor despite its significant investment and previous board involvement, raising further concerns about these partnerships.
Also Read: Amazon-Backed Anthropic Launches Claude AI Chatbot in Europe
