Amazon’s Anthropic deal sparks UK merger probe inquiry launched

LONDON — E-commerce giant Amazon’s multibillion-dollar investment in the U.S. artificial intelligence firm Anthropic is formally being investigated by a U.K. competition regulator. The Competition and Markets Authority said Thursday that it has begun a “Phase 1” investigation into Amazon’s investment and partnership with Anthropic to assess whether the deal has resulted in a relevant merger situation that may harm competition in the U.K.

Following initial scrutiny into the Amazon-Anthropic partnership, the CMA now has “sufficient information” in relation to the tie-up to begin a formal probe, the regulator said in a notice on its website. The CMA now has up to 40 working days to decide whether the transaction could harm competition and should therefore be scrutinized further in an in-depth “Phase 2” investigation.

Amazon completed in March a $4 billion investment in Anthropic. The deal consisted of an initial $1.25 billion equity stake in September, followed by a further $2.75 billion transaction finalized earlier this year. As part of the deal Amazon will make Anthropic’s powerful large language models available on its Bedrock platform for building generative AI applications. Anthropic’s models will also be trained and deployed on Amazon’s own custom AI chips, which were built by its Amazon Web Services cloud computing division.

Amazon’s investment in Anthropic is not the only deal facing scrutiny from regulators in the U.K. The CMA is separately scrutinizing U.S. software giant Microsoft’s multibillion-dollar partnership and investment in AI giant OpenAI. However, the watchdog is yet to reveal whether it will begin a Phase 1 investigation into the Microsoft-OpenAI partnership.

Stateside, the U.S. Federal Trade Commission in January sent orders to tech giants Microsoft, Amazon and Google, along with AI firms OpenAI and Anthropic, requiring them to share information about their respective recent investments and partnerships. Some smaller tech companies have criticized Big Tech firms over their strategy of building stakes in some of the key companies building advanced AI systems to get closer to them.

In response to the investigation, an Amazon spokesperson stated that the company is “disappointed” the CMA proceeded with an initial Phase 1 merger probe, adding that its collaboration with Anthropic “does not raise any competition concerns or meet the CMA’s own threshold for review.” The spokesperson emphasized that Amazon holds no board seat nor decision-making power at Anthropic, and that the company is free to work with any other provider. An Anthropic spokesperson also responded, stating that the company is an independent entity and that its strategic partnerships and investor relationships do not diminish its corporate governance independence or its freedom to partner with others.

The CMA’s investigation into Amazon’s investment in Anthropic is the latest example of regulatory scrutiny being directed at Big Tech firms’ AI partnerships and investments. This trend is expected to continue as regulators around the world seek to ensure that these companies do not unfairly use their market power to dominate the AI landscape.