The UK’s Competition and Markets Authority (CMA) has taken a proactive step by preliminary investigating Google’s partnership with the AI startup Anthropic, demonstrating its commitment to ensuring fair competition in the AI industry.
This is part of an ongoing scrutiny of the relationships between large tech and smaller AI companies. Google’s $2 billion investment in Anthropic, made in 2023, followed a cloud computing agreement with the startup known for developing the Claude language model and chatbot.
The CMA assesses whether this partnership constitutes a “relevant merger situation” that could warrant a formal investigation. The authority invites public comments to gather more information over the next two weeks.
This investigation, occurring amidst growing concerns about competition in the generative AI sector, has the potential to impact the industry significantly. Another deal involving Anthropic, in which Amazon invested $4 billion and secured a cloud computing agreement, is also under CMA scrutiny. This could be classified as a merger, prompting further regulatory review.
With its experience in conducting similar investigations, the CMA is well-equipped to handle this case. For instance, it looked into the partnership between Microsoft and OpenAI after Microsoft acquired a significant stake in OpenAI’s for-profit branch. Another investigation focused on Microsoft’s deal with the AI startup Inflection, following Microsoft’s acquisition of Inflection’s founder and leadership team and an agreement to access the startup’s AI models.
Regulatory authorities are increasingly vigilant about the concentration of power within big tech companies, especially in competitive sectors like AI. This has made outright acquisitions less common. Instead, regulators focus on partnerships and other arrangements that could hinder competition.
Anthropic has responded to the investigation by asserting its independence. A spokesperson for the company emphasized that the partnership with Google does not compromise its corporate governance or freedom to collaborate with other entities. Anthropic maintains that it remains independent despite its strategic partnerships and investor relationships.
Google, on the other hand, expressed its commitment to fostering an open and innovative AI ecosystem. The company highlighted that Anthropic is free to use multiple cloud providers and does not face any exclusive technology restrictions imposed by Google.
The CMA’s investigation into these partnerships underscores the ongoing regulatory efforts to ensure fair competition in the rapidly evolving AI industry. As large tech companies continue to invest in and partner with smaller AI startups, regulatory bodies closely monitor these relationships to prevent potential anti-competitive practices.
