UK Regulator Launches Full Investigation into Amazon's $4 Billion Investment in AI Startup Anthropic

CMA launches full blown probe of Amazon's Anthropic tie-up

Poor cloud titans, just trying to give a helping hand to AI startups valued at billions of dollars Britain's competition regulator is embarking on a full blown deep dive into Amazon's multi-billion dollar investments in Anthropic to ascertain if the exchange equates to a stealthy "merger situation." The Competition and Markets Authority invited interested third parties in April to provide input on the potential impact to their business of Amazon injecting $1.25 billion into Anthropic in September 2023, which was followed by $4 billion funding in March. The watchdog says [PDF] it now has "sufficient information in relation to the partnership between Amazon.com and Anthropic PBC" to launch an probe "for the purposes of deciding whether to make a reference for a phase 2 investigation" - a stage that would itself necessitate a even deeper inspection of the relationship. The decision deadline for that stage is scheduled for October 4, 2024. The ultimate aim is to discover if the investment "resulted in the creation of a relevant merger situation" under the provisions of the Enterprise Act 2002, and if so, could this result in a "substantial lessening of competition within any market or markets" within the UK for goods or services. In the burgeoning market for LLMs, regulators are wary of cloud giants Amazon Web Services, Microsoft, and Google using their financial muscle to control fledgling organizations and tighten their grip on the tech. Amazon's $5.25 billion investment in the AI upstart includes Anthropic agreeing to purchase cloud resources on AWS and a non-exclusive accord to host its models of Amazon Bedrock, its platform for building GenAI apps. The Jeff Bezos empire previously told The Register in the spring that the CMA's review of a "collaboration of this type" was "unprecedented." Today, a spokesperson at the megacorp said in a statement emailed to us: "We're disappointed that the UK's Competition and Markets Authority (CMA) has not ended its probe yet. "Amazon's collaboration with Anthropic does not raise any competition concerns or meet the CMA's own threshold for review. The early days of generative AI have largely seen one successful option available for customers. Anthropic has worked hard to become an emerging viable alternative. "But, building models is expensive, and companies like Anthropic need access to a substantial amount of capital to train these models. By investing in Anthropic, Amazon, along with other companies, is helping Anthropic expand choice and competition in this important technology. Amazon holds no board seat nor decision-making power at Anthropic, and Anthropic is free to work with any other provider (and indeed has multiple partners)." The bit about the board seat, who could Amazon be referring to? Likely Microsoft's cosy relationship with OpenAI, although Microsoft quit its board seat in July when regulators began taking a closer look. The spokesperson added: "Amazon will also continue to make these Anthropic models available to customers via Amazon Bedrock, a service that makes it easier for developers and companies to leverage large language models (LLMs) and build generative AI applications." Anthropic sent a statement to The Register. "We are an independent company. Our strategic partnerships and investor relationships do not diminish our corporate governance independence or our freedom to partner with others... We intend to cooperate with the CMA and provide them with a comprehensive understanding of Amazon's investment and our commercial collaboration." The alliance between the pair has already caught the attention of the Federal Trade Commission in the US, and the American regulator is also inquiring about Google's investment in Anthropic and Microsoft's investment in OpenAI in the same probe. 4 stories In addition to OpenAI, Microsoft did a deal with Inflection AI, after co-founders Mustafa Suleyman and Karén Simonyan, and a bunch of staff, joined the Redmond HQ'd org in March. Microsoft paid Inflection AI $650 million in a licensing deal, while poaching the staff. This move too is under the watchful gaze of the CMA and the EC's authorities. Regulators want to know if these moves are stealthy strategies to lock in fledgling developers of LLMs to the already powerful cloud titans, and what impact this will have on the wider user landscape. Reg readers should feel free to give the CMA and other authorities across the globe some insight in the comments section below. ®

UK regulator launches formal probe into Amazon's $4bn Anthropic deal

The UK's competition watchdog has launched a formal merger inquiry into Amazon's investment in the high-profile artificial intelligence start-up Anthropic, as regulators step up their scrutiny of deals in the fast-growing technology. The Competition and Markets Authority said on Thursday that it had "sufficient information" about the partnership with the company behind the Claude generative AI models to begin an investigation. It will decide whether to escalate the inquiry by October 4. Amazon said it was "disappointed" by the decision and that its work with Anthropic "does not raise any competition concerns or meet the CMA's own threshold for review". "By investing in Anthropic, Amazon, along with other companies, is helping Anthropic expand choice and competition in this important technology," it said. Thursday's move comes weeks after the CMA officially launched a formal merger inquiry into rival Microsoft's hiring of staff from start-up Inflection AI. The tech giant paid $650mn in March to hire a number of the start-up's staff, including its chief executive Mustafa Suleyman, co-founder of Google's DeepMind, and to license its technology. Regulators worldwide have increasingly turned their attention to the alliances being forged between Big Tech and AI start-ups that are developing the technology that has captured global attention and which advocates promise will usher in a new era of computing. The tie-ups have prompted concerns that the world's largest and most well-capitalised companies are set to wield an outsized influence over how the hugely expensive technology will develop and who the winners from its adoption will be. Amazon's $4bn Anthropic investment is among the prominent AI deals that the CMA said in April it was seeking views about as it took steps to probe what it called potentially anti-competitive behaviour. The CMA said at the time that it was considering whether the partnership amounted to a merger and, if so, whether that posed competition risks. The watchdog must seek comments before launching a formal investigation. The deadline for the watchdog to escalate its probe into Microsoft and Inflection to the next level is September 11. A number of regulators globally are probing Microsoft's $13bn partnership with the leading start-up OpenAI. The Seattle-based company said in July that it had given up its seat as an observer on the board of OpenAI. But it retains the exclusive right to provide the cloud computing services required by the start-up. The CMA invited comments on the deal last year, but has not yet announced whether it will escalate its probe into a formal merger inquiry. Amazon, by contrast, is not Anthropic's exclusive cloud provider, nor has it ever held a seat on the start-up's board. Google has also taken a multibillion-dollar stake in the start-up. Earlier this year, the Federal Trade Commission, the CMA's US counterpart, launched an inquiry into both Amazon and Google's investments in Anthropic, as well as into Microsoft's backing of OpenAI, the group behind ChatGPT.

UK regulator to examine Amazon investment in AI startup Anthropic

Move is the latest of a string of CMA investigations into technology tie-ups Amazon's $4bn investment into US artificial intelligence startup Anthropic is to be examined in the latest of a string of investigations into technology tie-ups by the UK's competition watchdog. The Competition and Markets Authority (CMA) said on Thursday that it was launching a preliminary investigation into the deal, before deciding whether to refer it for an in-depth review. The deal, announced in March, included a $4bn ( £3.16bn) investment in Anthropic from Amazon, and a commitment from Anthropic to use Amazon Web Services "as its primary cloud provider for mission critical workloads, including safety research and future foundation model development". The regulator said it was "considering whether it is or may be the case that Amazon's partnership with Anthropic has resulted in the creation of a relevant merger situation". An Anthropic spokesperson said: "We are an independent company. Our strategic partnerships and investor relationships do not diminish our corporate governance independence or our freedom to partner with others. "Amazon does not have a seat on Anthropic's board, nor does it have any board observer rights. We intend to cooperate with the CMA and provide them with a comprehensive understanding of Amazon's investment and our commercial collaboration." An Amazon spokesperson said: "We're disappointed that the UK's CMA has not ended its probe yet. Amazon's collaboration with Anthropic does not raise any competition concerns or meet the CMA's own threshold for review. "The early days of generative AI have largely seen one successful option available for customers. Anthropic has worked hard to become an emerging viable alternative. But, building models is expensive, and companies like Anthropic need access to a substantial amount of capital to train these models." Amazon said its investment would help increase competition in the emerging sector and that Anthropic was "free to work with any other provider (and indeed has multiple partners)". Last week, the CMA announced an almost identical inquiry into Google's partnership with Anthropic. It is also investigating Microsoft's unusually structured tie-ups with AI lab Inflection and OpenAI, the creator of ChatGPT. An investigation by the CMA into a deal between Microsoft and the French AI startup Mistral was dropped in May.

Amazon's $4bn Anthropic investment faces UK merger probe

The CMA has until 4 October to decide if it will launch a more in-depth investigation into Amazon's partnership with Anthropic. The UK's Competition and Markets Authority (CMA) has launched a merger inquiry into Amazon's massive investments into AI start-up Anthropic due to competition concerns. Amazon became a massive investor into the AI start-up last year when it shared plans to invest $4bn into the start-up and its ChatGPT competitor Claude. This began with an initial investment of $1.25bn that gave the e-commerce giant a minority stake in the business. Amazon followed this up in February with a $2.75bn investment, further boosting its minority ownership position. Other tech giants have gained a foothold into Anthropic, such as Google and Salesforce. The CMA announced its concerns earlier this year and invited interested parties to comment on Amazon's investments into Anthropic. The authority said it had concerns that the partnership may have resulted in a "relevant merger situation" and that that development could impact competition in UK markets. The UK watchdog confirmed today (8 August) that it has "sufficient information" to launch a phase one investigation into this partnership. If sufficient evidence is found that the CMA's concerns are valid, it can later launch a more in-depth phase two investigation. The investigation will commence from tomorrow onwards and the CMA said it will announce its decision on conducting a deeper investigation by 4 October 2024. As part of the deal between Anthropic and Amazon, the AI start-up said it will use AWS Trainium and Inferentia chips to build, train and deploy its future foundation models. The two will also work together on improving the chips in the future. Amazon developers and engineers will also be able to build with Anthropic models via Amazon Bedrock so they can "incorporate generative AI capabilities into their work". The moves Amazon took to partner up with Anthropic are similar to the investments Microsoft made into OpenAI, the creator of ChatGPT. Microsoft reportedly invested billions of dollars to gain a minority stake in the business. The focus on AI helped propel the tech giant into becoming the most valuable company in the world. The CMA appeared to be on the road to investigating the partnership between Microsoft and OpenAI towards the end of 2023, but there have been no developments since then. The CMA has instead focused on the tech giant's investments into other AI start-ups such as Inflection AI. Find out how emerging tech trends are transforming tomorrow with our new podcast, Future Human: The Series. Listen now on Spotify, on Apple or wherever you get your podcasts.

Amazon's $4 Billion Investment in AI Startup Anthropic Comes Under U.K. Scrutiny -- Update

U.K. antitrust officials are probing whether Amazon.com's multibillion-dollar investment in artificial-intelligence company Anthropic poses a threat to competition, the latest foray by European regulators into ties between U.S. tech giants and AI startups. Amazon had poured about $4 billion into Anthropic by the end of March, gaining a minority ownership position in the startup as it jockeys for position in the AI arms race with the likes of Alphabet's Google, Microsoft and ChatGPT maker OpenAI. Google last year agreed to invest up to $2 billion in Anthropic. For Amazon, the funding marked its largest investment in another company since the e-commerce giant was founded three decades ago. Big Tech firms have been splurging on AI startups for years to get their hands on what they see as promising AI features that they hope to cash in on further down the line. However, those investments are increasingly the focus of regulators on both sides of the Atlantic. The U.K's Competition and Markets Authority said it was seeking to establish whether Amazon's ties with Anthropic should be considered a de facto merger that might stifle competition in the U.K. An initial decision is due by Oct. 4. An Amazon spokesperson said the company's ties to Anthropic didn't raise any competition concerns or meet the CMA's own threshold for a review. Amazon doesn't hold a board seat or decision-making powers at the startup, meaning Anthropic is free to work with any other partner of its choosing, the spokesperson said. "Building models is expensive, and companies like Anthropic need access to a substantial amount of capital to train these models," the Amazon spokesperson said. "By investing in Anthropic, Amazon, along with other companies, is helping Anthropic expand choice and competition in this important technology." A spokesperson for Anthropic said the startup remained an independent company since Amazon doesn't have a seat on Anthropic's board or any board observer rights. "Our strategic partnerships and investor relationships do not diminish our corporate governance independence or our freedom to partner with others," the Anthropic spokesperson said. The U.K. probe comes weeks after British officials launched a separate inquiry into Microsoft's ties with and hiring of former employees from Inflection AI, underscoring growing pressure that tech giants face to justify their arrangements with AI startups. British antitrust officials are also looking into whether Microsoft's partnership with OpenAI should be considered a de facto merger. Closer scrutiny has already forced Microsoft to loosen the strings on some arrangements. Last month, the group relinquished its seat as an observer on OpenAI's board after Microsoft realized its position had unsettled some antitrust officials. In the U.S., the Federal Trade Commission launched an inquiry into generative AI partnerships earlier this year, ordering companies to provide information regarding recent investments into startups. News Corp, owner of Dow Jones Newswires and the Journal, has a content-licensing partnership with OpenAI.

Amazon's AI partnership with Anthropic is under inquiry, UK regulator says

Days after the U.K. antitrust agency said it was looking into Google's (NASDAQ:GOOG) (NASDAQ:GOOGL) partnership with artificial intelligence startup Anthropic, it's doing the same with Amazon (NASDAQ:AMZN). The Competition and Markets Authority said it is considering whether the partnership between the Andy Jassy-led Amazon and Anthropic "has resulted in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services." The CMA said it notified both Amazon and Anthropic that it has "sufficient information" and started Phase 1 of an investigation. The deadline for the CMA to determine it will move onto a Phase 2 investigation is October 4. An Amazon spokesperson said it was "disappointed" that the CMA has not yet ended its probe. "Amazon's collaboration with Anthropic does not raise any competition concerns or meet the CMA's own threshold for review," an Amazon spokesperson said in an email to Seeking Alpha. "The early days of generative AI have largely seen one successful option available for customers. Anthropic has worked hard to become an emerging viable alternative. But, building models is expensive, and companies like Anthropic need access to a substantial amount of capital to train these models. By investing in Anthropic, Amazon, along with other companies, is helping Anthropic expand choice and competition in this important technology." Amazon shares were fractionally higher in premarket trading on Thursday. Anthropic did not immediately respond to a request for comment from Seeking Alpha. In May, the CMA said that a similar deal between Microsoft (MSFT) and French AI startup Mistral AI did not qualify for investigation. Amazon announced in March that it would invest an additional $2.75B into Anthropic, maker of the Claude AI chatbot, bringing its total to $4B. The investment gave Amazon a minority stake in Anthropic but without a board seat. Anthropic is the largest outside investment for Amazon following a $1.3B investment in EV-maker Rivian (RIVN). Anthropic was last valued at $18.4B, according to CNBC. Several other tech companies have also invested in Anthropic, including Google and Salesforce (CRM). Anthropic has a deal with Amazon to use Amazon Web Services for mission-critical workloads, including safety research and future foundation model development. Anthropic also has a deal with Google to use its newest artificial intelligence-focused processors, known as TPU v5e, as well as its cloud services. More on Amazon, Alphabet, etc. Amazon: A Deeply Undervalued Business Powerhouse Amazon: Not Behind On AI Amazon's Amazing Buying Opportunity Pegasystems collaborates with AWS to deliver Pega EU Service Boundary Magnificent 7: how big tech stocks have moved since selloff sparked by recession fears

Amazon's AI partnership with Anthropic under UK probe

Anthropic says it intends to cooperate with the probe and provide a comprehensive understanding of Amazon's investment and its commercial collaboration. -- Reuters Britain's competition watchdog said on Thursday it had started an investigation into whether Amazon's partnership with Anthropic raised competition concerns in the artificial intelligence (AI) industry, days after it began a similar probe on Alphabet's collaboration with the startup. The Competition and Markets Authority (CMA) said it now had until October 4 for its so-called Phase 1 decision to either refer the partnership for a deeper probe or clear it of competition concerns. "Our strategic partnerships and investor relationships do not diminish our corporate governance independence or our freedom to partner with others. Amazon does not have a seat on Anthropic's board, nor does it have any board observer rights," an Anthropic spokesperson said in an emailed statement. "We intend to cooperate with the CMA and provide them with a comprehensive understanding of Amazon's investment and our commercial collaboration." Regulators in the United States, European Union and Britain signed a joint statement in July promising to work together to safeguard fair competition in the industry.

UK starts probe into Amazon's AI partnership with Anthropic

Britain's competition watchdog said on Thursday it had started an investigation into whether Amazon's partnership with AI startup Anthropic raised competition, days after it began a similar probe on Alphabet's collaboration with the startup. "Amazon's collaboration with Anthropic does not raise any competition concerns or meet the CMA's own threshold for review," an Amazon spokesperson said in an emailed statement. "Amazon holds no board seat nor decision-making power at Anthropic, and Anthropic is free to work with any other provider (and indeed has multiple partners)," the spokesperson said, echoing comments from an Anthropic spokesperson. "Our strategic partnerships and investor relationships do not diminish our corporate governance independence or our freedom to partner with others," the Anthropic spokesperson said. "We intend to cooperate with the CMA and provide them with a comprehensive understanding of Amazon's investment and our commercial collaboration." Late in July, CMA launched a probe into Google parent Alphabet's partnership with Anthropic, which was co-founded by former OpenAI executives and siblings Dario and Daniela Amodei. Antitrust regulators around the world have been increasingly concerned by multiple deals struck between smaller industry startups and big tech giants. Regulators in the United States, European Union and Britain signed a joint statement in July promising to work together to safeguard fair competition in the industry.

Amazon's $4 billion investment in AI firm Anthropic faces UK merger investigation

LONDON -- E-commerce giant Amazon's multibillion-dollar investment in the U.S. artificial intelligence firm Anthropic is formally being investigated by a U.K. competition regulator. The Competition and Markets Authority said Thursday that it has begun a "Phase 1" investigation into Amazon's investment and partnership with Anthropic to assess whether the deal has resulted in a relevant merger situation that may harm competition in the U.K. Following initial scrutiny into the Amazon-Anthropic partnership, the CMA now has "sufficient information" in relation to the tie-up to begin a formal probe, the regulator said in a notice on its website. The CMA now has up to 40 working days to decide whether the transaction could harm competition and should therefore be scrutinized further in an in-depth "Phase 2" investigation. Amazon and Anthropic were not immediately available for comment when contacted by CNBC.

Amazon's Investment Into AI Startup Anthropic Faces U.K. Scrutiny

U.K. antitrust officials are probing whether Amazon.com's multi-billion-dollar investment in artificial-intelligence startup Anthropic poses a threat to competition. The U.K's Competition and Markets Authority said it was seeking to establish whether Amazon's ties with Anthropic should be considered a de facto merger that might stifle competition in the U.K. An initial decision is due by Oct. 4. Amazon didn't immediately respond to a request for comment. Amazon had invested about $4 billion in Anthropic by the end of March.