The UK’s Competition and Markets Authority (CMA) is investigating Alphabet’s investment in the AI startup Anthropic. After opening public comments earlier this year, the CMA stated on Thursday that it has gathered enough information to initiate a preliminary investigation to assess whether Alphabet’s reported $2.3 billion investment in the maker of the Claude AI chatbot affects competition within UK markets.
The CMA conducts merger investigations in two stages: an initial review to establish if there is sufficient evidence for a more thorough examination, followed by an optional second phase where comprehensive evidence is collected to determine a regulatory decision.
The formal investigation is set to commence on Friday, and the CMA will decide by December 19 whether to proceed to a phase 2 investigation.
Google has communicated to Engadget that Anthropic is not limited to using its cloud services. A Google spokesperson commented in an email, stating, "Google is committed to building the most open and innovative AI ecosystem in the world. Anthropic is free to use multiple cloud providers and does, and we don’t demand exclusive tech rights." Engadget is awaiting further comments from the CMA.
According to TechCrunch, Alphabet reportedly invested $300 million in Anthropic in early 2023, followed by an additional $2 billion later that year. Such scenarios are sometimes referred to as "quasi-mergers," where large tech companies gain influence over emerging startups through strategic investments and hiring of founders and technical staff.
Amazon has made an even larger investment in Anthropic, totaling $4 billion. Following a public comment period, the CMA recently decided not to investigate Amazon’s investment. The CMA indicated that Amazon’s case differed due to current regulations: Anthropic’s UK turnover did not surpass £70 million, and the entities did not collectively hold 25 percent or more of the region’s supply in AI large language models and chatbots.
While the CMA has not clarified the specifics, something within Alphabet’s $2.3 billion investment prompted a more detailed review. Additionally, Google’s Gemini competes with Claude, as both companies offer large language models to small businesses and enterprise clients.
Update, October 25, 2024, 11:10 AM ET: This story has been updated to include a quote from a Google representative.
