The U.K.’s antitrust regulator has revealed an early-stage probe into Google’s ties with Anthropic, after the Alphabet subsidiary invested in its U.S. AI rival over several rounds.
While it’s not at an official investigation stage yet, the Competition and Markets Authority (CMA) is inviting stakeholders and other “interested parties” to comment ahead of a final decision on whether the partnership “has resulted in the creation of a relevant merger situation” and whether this will lead to a “substantial lessening of competition” in the U.K.
Founded out of San Francisco in 2021, Anthropic develops AI systems with a focus on safety, transparency, and risk-mitigation, establishing itself up as a public benefit corporation (PBC) to set itself apart from its rivals. Anthropic develops large language models (LLMs) and an associated chatbot called Claude, which is comparable to something like OpenAI’s ChatGPT or Google’s Bard.
Anthropic has raised nearly $10 billion in funding since its inception, with Google first investing a reported $300 million early last year followed by another reported $2 billion. However, Anthropic has been courting all manner of big-name investors, including Amazon which plowed $4 billion into the fledgling AI startup.
And all this activity has spurred regulators into action, with concerns big tech companies are adopting a new M&A approach designed to give them some control over the younger innovators without attracting the regulatory scrutiny that a full-fledged acquisition might. This so-called “quasi-merger” may involve hiring startup founders and technical talent, or making strategic investments.
Indeed, the CMA revealed in April that it was carrying out enquiries into several such deals, including Microsoft’s recent investment in French startup Mistral AI, though it soon concluded that this didn’t qualify for investigation under current merger regulations due to the size of the investment. The CMA is also looking at Amazon’s Anthropic’s ties, while separately it’s also expected to launch a full-scale probe into Microsoft’s close partnership with ChatGPT-maker OpenAI.
Earlier this month, the CMA also confirmed that it’s launching a full regulatory probe into Microsoft after it hired the core team behind OpenAI rival Inflection AI, a company that Microsoft had previously invested in.
Any interested parties have until August 13, 2024 to provide the CMA with comment, and there is no guarantee that the regulator will progress matters to a formal “phase 1” investigation.
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