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The Competition and Markets Authority (CMA) in the UK is launching an official “Phase 1” investigation into Amazon’s ties with Anthropic to determine if its latest investment qualifies under merger regulations.
AI startup Anthropic creates large language models (LLMs) and is probably best known for its chatbot Claude. Since the company was founded in 2021, it’s raised an impressive $10 billion. In March, Amazon completed a $4 billion investment in Anthropic.
The CMA is concerned that Big Tech companies like Amazon are using “quasi-merger” strategies in a bid to win the AI race and get around regulators. These large investments could give tech corporations control of startups, without the scrutiny required for a full-scale merger.
Regulator Probes Big Tech’s Ties with AI Startups
Amazon isn’t the only company under investigation by regulators. The CMA is also looking into Google’s ties with Anthropic following two investments of $300 million and $2 billion respectively. Microsoft is also under the microscope as the CMA probes its ties with OpenAI, creators of ChatGPT and carries out a full investigation into Microsoft’s recent acquisition of the core team behind Inflection AI, a company it had previously invested in.
A “Phase 1” investigation gives the regulator 40 working days to reach a decision. The CMA will decide by October 4th whether or not Amazon’s investment in Anthropic qualifies as a merger.
An Amazon spokesperson argued there were no competition concerns, and that its investment did not meet the CMA’s threshold for a review. The representative also maintained that the company’s investment doesn’t give it a majority stake in Anthropic.
A spokesperson for Anthropic said that its investor relationships and partnerships don’t affect its “corporate governance independence.”
Should the CMA decide that the deal qualifies under merger regulations, it will need to decide whether it has potential to harm competition in the UK market.
