The U.K.’s antitrust regulator has confirmed that it’s carrying out a formal antitrust investigation into Amazon’s ties with Anthropic, after Amazon recently completed a $4 billion investment into the AI startup.
The news comes a week after the Competition and Markets Authority (CMA) revealed it was launching an invitation to comment into Google’s own ties with Anthropic, after the internet giant first invested a reported $300 million last year followed by a further $2 billion.
Founded in 2021, San Francisco-based Anthropic, which has established itself as a public benefit corporation (PBC) to set itself apart from its rivals, develops large language models (LLMs) and an associated chatbot called Claude, similar to OpenAI’s ChatGPT or Google’s Bard. The company has raised a chunky $10 billion in its three-year history.
The ‘quasi-merger’
The AI startup goldrush has spurred Big Tech to pursue a multi-pronged approach to ensure they don’t miss out on any of the action. However, there are growing concerns that they are adopting a “quasi-merger” approach to M&A where they seek control over younger innovators through strategic investments or hiring startup founders and technical talent — anything to avoid the regulatory scrutiny that would come with a full-fledged acquisition.
The CMA is already gearing up to launch a full-scale probe into Microsoft’s close partnership with OpenAI, based on Microsoft making significant investments in the ChatGPT-maker through the years.
The regulator also revealed in April that it was carrying out initial inquiries into a triumvirate of similar deals involving Big Tech, including Microsoft’s investment in French startup Mistral AI. The CMA quickly concluded that the Mistral deal didn’t qualify for investigation under current merger regulations due to the size of the investment. However, the CMA said at the time that it was looking into Microsoft’s acqui-hire of the core team behind OpenAI rival Inflection AI, a company that Microsoft had previously invested in. Last month, the CMA said it would be extending this into a full “phase 1” probe.
The third component of the early-stage enquiries involved Amazon and Anthropic, and the CMA has now concluded it will be following through with an official phase 1 investigation. This means that it has 40 working days to decide whether the investment — which Amazon has previously said doesn’t give it a majority stake in Anthropic — qualifies under merger regulations, and if it does, whether it may harm competition in the U.K.
An Anthropic spokesperson said that its “strategic partnerships and investor relationships” don’t compromise its ability to work with other companies or its corporate governance independence.
“We are an independent company,” the spokesperson said in a statement issued to TechCrunch. “Amazon does not have a seat on Anthropic’s board, nor does it have any board observer rights. We intend to cooperate with the CMA and provide them with a comprehensive understanding of Amazon’s investment and our commercial collaboration.”
The CMA will now have until early October to decide whether to greenlight the deal, or push it through to a more in-depth investigation.