Regulator launches three investigations into Microsoft and Amazon
Britain’s competition watchdog has launched a tirade of investigations into whether Microsoft and Amazon’s partnerships with three different artificial intelligence (AI) startups have resulted in relevant merger situations.
The Competition and Markets Authority (CMA) has opened invitations to comment on whether partnerships between Microsoft and Mistral AI, Amazon and Anthropic, as well as Microsoft’s arrangements with Inflection AI, “fall within UK merger rules and the impact that these arrangements could have on competition in the UK.”
In September, Amazon invested an initial $4bn (£3.2bn) into AI safety and research company Anthropic, which it recently topped up with a further $2.75bn (£3.2bn).
Earlier this year, Microsoft poured €15m (£12.9m) into French startup mistral AI and it has arrangements with Inflection AI such as a non-exclusive licensing deal allowing it to use the American startup’s existing models.
Microsoft has also hired employees who formerly worked for Inflection AI, which has set out to create a ‘personal’ AI for everyone.
Joel Bamford, executive director of mergers at the CMA, said: “We will assess, objectively and impartially, whether each of these three deals fall within UK merger rules and, if they do, whether they have any impact on competition in the UK.
“Foundation Models have the potential to fundamentally impact the way we all live and work, including products and services across so many UK sectors – healthcare, energy, transport, finance and more.
“So open, fair, and effective competition in Foundation Model markets is critical to making sure the full benefits of this transformation are realised by people and businesses in the UK, as well as our wider economy where technology has a huge role to play in growth and productivity.
“Given the global nature of these markets, competition authorities around the world are actively looking into AI. The CMA recently committed to step up the use of its merger control powers as part of its recent Foundation Models update.
“While we remain open minded, and haven’t drawn any conclusions, our aim is to better understand the complex partnerships and arrangements at play.”
It comes just weeks after the CMA published a report into the risks of the most advanced AI systems, known as Foundation Models (FMs). Specifically, it is worried that big tech partnerships could give them too much market power and harm competition.
The regulator has already opened an invitation to comment into Microsoft’s partnership with OpenAI, the creator of ChatGPT.
A Microsoft spokesperson said: “We remain confident that common business practices such as the hiring of talent or making a fractional investment in an AI start-up promote competition and are not the same as a merger.
“We will provide the UK Competition and Markets Authority with the information it needs to complete its inquiries expeditiously.”
An Amazon spokesperson said: “It’s unprecedented for the CMA to review a collaboration of this type. Unlike partnerships between other AI startups and large technology companies, our collaboration with Anthropic includes a limited investment, doesn’t give Amazon a board director or observer role, and continues to have Anthropic running its models on multiple cloud providers.
“By investing in Anthropic, which has just released its industry-best, new Claude 3 models, we’re helping make the generative AI segment more competitive than it’s been the last couple years. And, customers are very excited about the opportunities this collaboration is providing them. We’re confident that the facts speak for themselves, and hope the CMA agrees to resolve this quickly.”
An Anthropic spokesperson said: “We intend to cooperate with the CMA and provide them with the complete picture about Amazon’s investment and our commercial collaboration.
“We are an independent company and none of our strategic partnerships or investor relationships diminish the independence of our corporate governance or our freedom to partner with others. Anthropic’s independence is a core attribute – integral both to our public benefit mission and to serving our customers wherever and however they prefer to access Claude.”
CityAM has approached Mistral AI and Inflection AI for comment.