UK competition watchdog investigates Amazon’s £3bn investment in AI Anthropic

Britain’s competition watchdog is launching a merger investigation into Amazon’s partnership with artificial intelligence (AI) firm Anthropic.

The Competition and Markets Authority (CMA) said it had “sufficient information” to begin an initial investigation into the partnership, which has seen the tech giant invest more than £3bn in the firm.

The watchdog is seeking to determine whether further investigation is necessary.

The decision is the latest in a series of decisions by the regulator examining close partnerships between big tech companies and artificial intelligence startups.

In a statement, an Amazon spokesperson said: ‘We are disappointed that the UK Competition and Markets Authority has not yet finalised its investigation.

‘Amazon’s collaboration with Anthropic does not raise any competition concerns nor does it meet the CMA’s own threshold for review.

‘In the early days of generative AI, there was only one successful option for customers. Anthropic has worked hard to become a viable emerging alternative.

‘But building models is expensive, and companies like Anthropic need access to a substantial amount of capital to train these models. By investing in Anthropic, Amazon, along with other companies, is helping Anthropic expand supply and competition in this important technology.

‘Amazon has no board seats or decision-making power at Anthropic, and Anthropic is free to work with any other supplier (and indeed has multiple partners).

‘Amazon will also continue to make these anthropic models available to customers through Amazon Bedrock, a service that makes it easy for developers and businesses to leverage large language models (LLMs) and build generative AI applications.’

An Anthropic spokesperson said: “We are an independent company. Our strategic alliances and investor relationships do not undermine our independence in corporate governance or our freedom to partner with others.

“Amazon does not have a seat on Anthropic’s board of directors or any observation rights thereon. We intend to cooperate with the CMA and provide them with a comprehensive overview of Amazon’s investment and our commercial collaboration.”

In recent weeks, the CMA announced investigations into Microsoft over its hiring of several employees from startup Inflection AI for its new AI team, while Google parent company Alphabet is also under scrutiny over a partnership with Anthropic.

In April, the CMA published a report highlighting its concerns about potential risks to open, fair and effective competition in the AI ​​market.

He pointed to what he called an “interconnected web” of more than 90 strategic partnerships and investments from the biggest names in tech, including Alphabet, Amazon, Apple and Microsoft, and AI startups — a setup he warned could be used to consolidate power and resources within the sector among a few companies.

Amazon, like Alphabet, has invested heavily in Anthropic, while Microsoft is the largest investor in OpenAI, the maker of ChatGPT.

OpenAI has also formed a partnership with Apple to integrate ChatGPT into future generations of iPhones as part of Apple’s plans to incorporate more generative AI tools into its products.

Concerns have been raised that these large investments and partnership deals could allow large companies to exert some control over the direction of AI companies without attracting the regulatory scrutiny that a full takeover might attract.