The U.K.’s Competition and Markets Authority (CMA) has announced an initial investigation into Google’s relationship with Anthropic, an AI company based in the U.S.
This inquiry follows Alphabet’s substantial investments in Anthropic across multiple funding rounds.
Although the investigation is in its early stages and not yet a formal inquiry, the CMA is taking a proactive approach. The authority is actively seeking input from stakeholders and interested parties to determine whether Google’s partnership with Anthropic could lead to a merger situation that significantly reduces competition within the U.K. market.
Established in 2021 and headquartered in San Francisco, Anthropic is unique in its focus on developing AI systems that prioritize safety, transparency, and risk mitigation. The company has further distinguished itself by positioning itself as a public benefit corporation (PBC), underscoring its ethical approach in a competitive industry.
Among its notable developments are large language models (LLMs) and the chatbot “Claude,” which is similar to OpenAI’s ChatGPT and Google’s Bard.
Anthropic has garnered nearly $10 billion in funding to date, with Google initially investing approximately $300 million and then an additional $2 billion. The company has also attracted investments from other tech giants, such as Amazon, which injected $4 billion into a related AI startup.
Regulators are particularly concerned about the emergence of what are termed ‘quasi-mergers,’ a practice where major tech firms like Google and Amazon strategically invest in promising startups to influence their direction without triggering traditional merger scrutiny. This practice, which includes hiring startup founders and technical talent, poses potential risks that regulators are keen to address.
The CMA had previously reviewed similar deals, including Microsoft’s investment in Mistral AI, but concluded they did not necessitate further investigation under current merger regulations.
Additionally, the regulator is expected to launch a comprehensive inquiry into Microsoft’s close ties with OpenAI after acquiring Inflection AI’s core team.
The investigation into Google’s collaboration with Anthropic marks the latest regulatory scrutiny of tech companies’ strategic investments and partnerships, which aim to shape the future landscape of AI development and competition.
