Amazon Evades UK Antitrust Scrutiny Amid Anthropic Investment Deal

The U.K. antitrust authority has determined that Amazon’s partnership and equity investment in AI startup Anthropic cannot be investigated under current merger regulations due to the deal’s size and scope.

The announcement from the U.K. Competition and Markets Authority (CMA) comes exactly six months after reports revealed Amazon's $4 billion investment in Anthropic, one of the numerous well-funded AI startups. Established just three years ago, Anthropic specializes in developing large language models (LLMs) and its chatbot, Claude, which rivals OpenAI's ChatGPT and Google’s Bard.

Based in San Francisco, Anthropic operates as a public benefit corporation (PBC) and has raised around $10 billion since it was founded. In addition to the substantial investment from Amazon, Anthropic has attracted over $2 billion from Google’s parent company, Alphabet. Currently, the CMA has initiated an early-stage “invitation to comment” regarding Google’s investment, which is still pending review.

The CMA considered whether key elements of the Amazon-Anthropic partnership could lead to “material influence” of Amazon over Anthropic. This scrutiny reflects a growing concern in the AI industry, where critics argue that major tech companies are seeking control over startups through a new approach to mergers and acquisitions that stops short of full buyouts. This so-called “quasi-merger” can involve hiring startup founders and talent or making strategic investments.

However, the CMA concluded that a “relevant merger situation” had not arisen under the Enterprise Act 2002 criteria, meaning it did not reach the point of determining if Amazon has gained “material influence” over Anthropic. Specifically, Anthropic's U.K. revenue does not meet the £70 million threshold required for investigation, and neither company collectively holds a market share of 25% or more in the relevant goods or services.

"Anthropic remains an independent company, and our strategic partnerships and investor relationships do not undermine our corporate governance independence or our ability to collaborate with other entities," an Anthropic spokesperson stated.

This inquiry is one of many the CMA has initiated recently. It recently approved Microsoft's Inflection acqui-hire, deeming it essentially a merger. Moreover, Microsoft also avoided antitrust scrutiny when acquiring a stake in Mistral AI.

In a separate matter, the CMA is investigating Microsoft’s close relationship with OpenAI. Last year, it formally invited stakeholders to comment on this issue, but no further developments have been announced as of yet.