Google's parent company, Alphabet (GOOGL, Financial), pledged a $2 billion investment in the AI startup Anthropic and signed a cloud services agreement prior to the funding. The UK's Competition and Markets Authority (CMA) has now launched a formal phase one merger investigation into this collaboration to ensure fair competition in the AI sector and to prevent monopolistic control by a few companies.
The CMA's involvement signifies increased regulatory scrutiny on large tech companies' investments in AI startups. While the CMA is leading the investigation in the UK, similar regulatory bodies, such as the U.S. Federal Trade Commission and the European Union, are also evaluating tech companies' partnerships in this space.
Other notable investments include Microsoft's stake in OpenAI, which could face similar regulatory challenges in the UK, whereas Amazon's $4 billion deal with Anthropic was cleared by regulators in September. The CMA determined that Anthropic's local revenue and market share were insufficient to warrant intervention in the Amazon deal.
Additionally, the CMA swiftly examined Microsoft's transactions with Mistral and Inflection, setting a December 19 deadline to decide if further investigation is needed.
Google and Anthropic have expressed their willingness to cooperate with the CMA's investigation. Google emphasized that Anthropic is free to choose cloud service providers without any exclusive rights demands, while Anthropic assured it will provide comprehensive information about its business collaboration with Google.
