The UK’s Competition and Markets Authority (CMA) has initiated a formal investigation into the partnership between Alphabet, the parent company of Google, and artificial intelligence (AI) firm Anthropic, citing concerns over market competition.
This Phase 1 probe follows almost two years after OpenAI, backed by Microsoft, launched ChatGPT, which sparked rapid advancements in AI. Since then, regulators globally have increasingly examined agreements between large technology firms and smaller AI startups.
Anthropic, founded by Dario and Daniela Amodei, both former executives at OpenAI, disclosed last year that it had secured a $500m investment from Alphabet. The company also revealed that Alphabet had committed to investing an additional $1.5bn over time. As part of its operations, Anthropic uses Google Cloud services provided by Alphabet, reported Reuters.
The CMA has been assessing the partnership between Alphabet and Anthropic since July, when it began gathering feedback to determine if the arrangement could affect competition in the UK market. The regulatory body has set a deadline of 19 December 2024 for its Phase 1 review, at which point it will decide whether to escalate the investigation further.
A spokesperson for Anthropic stated that the company would cooperate fully with the CMA’s inquiry, providing a comprehensive overview of its relationship with Google. “We are an independent company, and none of our strategic partnerships or investor relationships diminish the independence of our corporate governance or our freedom to partner with others”, the spokesperson said.
A representative from Alphabet expressed that the company is dedicated to building an open and innovative AI network globally. “Anthropic is free to use multiple cloud providers and does; we do not insist on exclusive technology rights”, the spokesperson said.
CMA’s crusade against Big Tech AI partnerships
The CMA is actively scrutinising big tech’s partnerships with AI startups, focusing on whether these agreements could reduce competition. As part of these efforts, the regulator has launched several probes, including investigations into collaborations involving Amazon, Microsoft, and Google with AI firms like Anthropic and Inflection AI.
However, the CMA’s efforts have seen setbacks. For instance, it recently dropped its investigation into Microsoft’s investment in Mistral AI, determining that the deal did not meet the threshold for regulatory action. Despite initial concerns, the CMA concluded that Microsoft did not possess enough influence over Mistral to warrant further scrutiny.
The CMA has also recently cleared Amazon’s partnership with Anthropic, determining that the deal does not qualify as a relevant merger situation under UK competition law. The partnership, announced last year, involved Amazon investing approximately $4bn into Anthropic and establishing a non-exclusive agreement for Amazon Web Services (AWS) to provide computing resources to the AI startup.
Read more: CMA ends probe into $4bn partnership between Amazon and Anthropic
