As regulators increase focus on investments in emerging AI companies, the partnership between Google and Anthropic is facing potential regulatory scrutiny in the UK. The UK's Competition and Markets Authority (CMA) has initiated a formal Phase 1 merger investigation into their collaboration. This move aims to ensure fair market competition and prevent monopolization in the AI industry.
Last year, Google's parent company, Alphabet (GOOGL, Financial), committed to a $2 billion investment in Anthropic and established a significant cloud services agreement with the firm before the financing round. The CMA's involvement indicates a watchful eye on big tech companies' investment activities in AI by UK regulators. The United States Federal Trade Commission (FTC) and the European Union are also examining various partnerships in the sector.
In the UK, Microsoft's (MSFT) investment in OpenAI may face similar regulatory hurdles, whereas Amazon's (AMZN) $4 billion investment in Anthropic recently passed CMA review. During their evaluation of Amazon's deal, the CMA determined Anthropic's revenue in the UK and market share were too low for intervention. The CMA has also quickly investigated Microsoft's transactions with Mistral and Inflection, setting a deadline of December 19 to decide on a further in-depth inquiry.
Google and Anthropic have expressed their willingness to cooperate with the investigation. Google emphasized Anthropic's freedom to choose multiple cloud service providers and denied any demand for exclusive technological rights. An Anthropic spokesperson also confirmed their intent to collaborate with the CMA by providing comprehensive information on Google's investment and their business partnership.
