UK Antitrust Watchdog Probes Amazon's $4B Investment in Anthropic

Amazon’s $4 billion investment in Claude developer and OpenAI competitor Anthropic is being investigated by U.K. antitrust authorities.

The U.K.’s Competition and Markets Authority (CMA) has initiated an investigation to assess whether Amazon's investment in a particular company constitutes a "relevant merger situation." 

A relevant merger situation involving transactions or arrangements, such as the acquisition of a significant minority stake or other control measures, might significantly affect competition within the market.

These arrangements could impact competition if they grant one company control over another or influence its operations in a way that affects the competitive landscape.

The CMA, which began its initial inquiry into the deal back in April, said it had obtained “sufficient information” to launch a full-blown investigation.

The antitrust regulator has now commenced a Phase 1 probe, giving it 40 days to conduct an initial review over whether Amazon’s investment raises competition concerns.

The CMA will then announce its decision on whether to move the case to a Phase 2 investigation, which is considerably more in-depth, on Oct. 4. 

Amazon announced in March it was expanding its investment in Anthropic having already taken a minority share in the startup last September.

Related:FTC Opens Probe into OpenAI, Anthropic and Cloud Partners

Amazon provided the Claude developer $1.25 billion, taking its total investment in the startup to $4 billion

Amazon has routinely described its Anthropic ties as a “strategic collaboration” — a description similar to how Microsoft bills its partnership with rival OpenAI.

AWS is Anthropic’s main cloud provider but not it’s not an exclusive partner as another minority shareholder in Anthropic is hyperscale rival Google.

Anthropic's partnership with Amazon also gives it access to Amazon's custom hardware for training its AI models, including Trainium and Inferentia chips. Anthropic provides feedback to the company to improve future hardware.

The CMA’s investigation into Amazon’s Anthropic investments is the second antitrust agency looking into the deal following the U.S. Federal Trade Commission’s probe launched earlier this year.

“The fact that CMA is going to be looking in depth at this particular transaction will doubtless again bring up a debate which is ongoing as to how far competition regulators should go to intervene in the AI space at such a crucial time for its overall development,” said Alex Haffner, a competition partner at law firm Fladgate.

“It is the next of a series of cases being run by competition authorities globally into tie-ups between ‘Big Tech’ and innovative AI scale-ups based on concerns around control of the fast-moving and evolving AI sector,” Haffner said. “The CMA in particular having previously highlighted its desire to maintain close oversight over the ‘complex web’  of partnerships and other corporate deals that have taken place between those actors.”

Related:Amazon Invests $4B to Advance Generative AI Tech to Customers