Amazon’s Anthropic investment latest to face antitrust headwinds with UK Competition inquiry

7 months ago 26

Amazon’s investment into Anthropic is the latest cooperation of big tech companies with AI startups to face antitrust headwinds, since the UK’s Competition Market Authority (CMA) announced an inquiry into the partnership today (24 April).

The e-commerce giant said it is pouring $4 billion into the US startup in September 2023, along with a “strategic collaboration” between the two companies.

The latest round of funding was completed on 27 March 2024. Amazon’s Web Services is Anthropic’s “primary” cloud provider under this partnership.

The CMA is concerned that the partnership has “resulted in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002,” which could lead to adverse effects on competition in the UK, the authority said today.

A CMA investigation of a “collaboration” of this type is “unprecedented,” an Amazon spokesperson told Euractiv.

The “collaboration with Anthropic includes a limited investment, doesn’t give Amazon a board director or observer role, and continues to have Anthropic running its models on multiple cloud providers,” said the spokesperson.

Meanwhile, the European Commission has reportedly dropped a merger probe into Microsoft’s $13 billion investment into ChatGPT maker OpenAI but is still examining a competition angle.

At the time of publication, the Commission did not respond to Euractiv’s question as to whether it is launching an inquiry into the Amazon and Anthropic cooperation.

According to a separate press release, the CMA is inviting interested third parties to comment on similar partnerships until 9 May; the Microsoft and Mistral AI partnership and “Microsoft’s hiring of former employees and related arrangements with Inflection AI.”

The invitation for comment doesn’t mean the first phase of an official investigation is launched, the authority noted.

The CMA is trying to determine whether these partnerships between big tech firms and AI startups fall within merger rules.

A report published earlier in April by the UK authority found that 90 such partnerships exist, recognising that they can act as important boosts to innovation.

But the authority remains “vigilant against the possibility that incumbent firms may try to use partnerships and investments to quash competitive threats,” the report read.

[Edited by Rajnish Singh]