UK Initiates Official Investigation into Amazon's Relationship with AI Startup Anthropic

The U.K.’s antitrust regulator has officially launched a formal investigation into Amazon's recent $4 billion investment in the AI startup, Anthropic. This announcement follows the Competition and Markets Authority’s (CMA) earlier decision to gather feedback regarding Google’s connection with Anthropic, after the tech giant invested a reported $300 million last year, followed by an additional $2 billion.

Founded in 2021, Anthropic is a San Francisco-based public benefit corporation (PBC) that differentiates itself in the competitive AI landscape. The company specializes in developing large language models (LLMs) and operates a chatbot named Claude, which is comparable to OpenAI’s ChatGPT and Google’s Bard. Throughout its brief history, Anthropic has attracted significant investment, totaling $10 billion.

The ‘Quasi-Merger’

The growing interest in AI has prompted major tech companies to adopt a multifaceted strategy to capitalize on emerging opportunities. However, there are rising concerns that these companies may be engaging in a “quasi-merger” approach to mergers and acquisitions (M&A). This includes gaining influence over innovative startups through strategic investments or the acquisition of key personnel, all while attempting to minimize regulatory scrutiny that would accompany a formal acquisition.

The CMA is also preparing to investigate Microsoft’s close collaboration with OpenAI, fueled by the substantial financial backing Microsoft has provided to the maker of ChatGPT over the years. Earlier in April, the regulator disclosed that it was conducting initial inquiries into multiple similar transactions involving large tech firms, including Microsoft’s investment in French startup Mistral AI. Although the CMA determined that this particular deal did not warrant investigation based on its size, it noted that it was examining Microsoft’s acquisition of key personnel from its previous investment in rival Inflection AI. Recently, the CMA announced this would progress to a full “phase 1” investigation.

The investigation into Amazon's relationship with Anthropic is a key aspect of these inquiries. The CMA has now committed to a formal phase 1 investigation, which obligates the regulator to assess within 40 working days whether Amazon’s investment—reported not to secure a majority stake in Anthropic—falls under merger regulations and if it could potentially stifle competition in the U.K. market.

An Anthropic representative has asserted that the company’s “strategic partnerships and investor relationships” do not impede its ability to collaborate with other businesses or maintain its corporate governance integrity. “We operate as an independent entity,” the spokesperson stated. “Amazon does not sit on Anthropic’s board, nor does it have board observer rights. We are committed to cooperating with the CMA to provide a thorough understanding of Amazon’s investment and our commercial partnership.”

The CMA now has until early October to decide whether to approve the deal or refer it for a more detailed investigation.