UK Antitrust Regulator Investigates Amazon's $4B Investment in Anthropic

The U.K.'s Competition and Markets Authority (CMA) is investigating Amazon's $4 billion investment in Anthropic, a developer and OpenAI competitor. The CMA is looking into whether this investment constitutes a "relevant merger situation" that could impact competition within the market.

A relevant merger situation arises when transactions, such as acquiring a significant minority stake or control measures, could grant one company control over another or affect the competitive landscape. The CMA initiated an inquiry into the deal back in April and has now launched a full investigation.

The Phase 1 probe will be conducted over 40 days to determine if Amazon's investment raises competition concerns. The CMA will decide whether to move the case to a Phase 2 investigation, scheduled for Oct. 4. Amazon announced its expansion of investment in Anthropic in March, with a previous minority share investment last September.

Amazon has characterized its partnership with Anthropic as a "strategic collaboration." Anthropic's main cloud provider is AWS, with another minority shareholder being Google. The partnership provides Anthropic access to Amazon's custom hardware for training AI models, such as Trainium and Inferentia chips, allowing for collaborative feedback for future hardware improvements.

The CMA's investigation into Amazon's investments in Anthropic follows the U.S. Federal Trade Commission's probe earlier this year. This scrutiny raises questions about the extent to which competition regulators should intervene in the AI space amidst rapid development. Alex Haffner, a competition partner at Fladgate, notes that this case is part of a global trend in which competition authorities are monitoring tie-ups between major tech companies and innovative AI scale-ups to oversee the evolving AI sector.