UK competition watchdog scrutinises Alphabet and Anthropic tie-up
The Competition and Markets Authority (CMA) is currently investigating the potential anti-competitive nature of Alphabet’s partnership with Anthropic in the tech sector.
There is a growing competition in the tech industry for artificial intelligence (AI) talent and capabilities, prompting the UK regulator to examine whether collaborations between major tech companies and AI startups are fostering a fair and competitive market environment.
Alphabet made a significant investment of $2bn in Anthropic, a competitor of OpenAI, in October 2023. Additionally, Amazon has also provided $4bn in funding to the AI startup.
During a second-quarter earnings call, Alphabet’s CEO Sundar Pichai announced the company’s expanded support for third-party models, such as Anthropic’s Claude 3.5 Sonnet, and open source models like Gemma 2, Llama, and Mistral.
The CMA is scrutinizing how tech giants are leveraging their influence in AI by financially backing AI startups, whose services are then integrated into their public cloud infrastructure.
In April 2024, the CMA invited interested parties to share their perspectives on whether the partnerships between Microsoft and Mistral AI, Amazon and Anthropic, as well as Microsoft’s recruitment of former employees and related agreements with Inflection AI, comply with UK merger regulations.
Joel Bamford, the CMA’s executive director of mergers, emphasized the importance of maintaining open and fair competition in foundation model markets to ensure that the benefits of technological advancements are accessible to individuals and businesses in the UK and the broader economy.
As an industry, we should be cautious over powerful partnerships as they pose a threat to the entire ecosystem by suffocating competition and innovation
Josh Mesout, Civo
In July, the CMA initiated an initial probe into the recruitment of Inflection AI’s co-founders Mustafa Suleyman and Karén Simonyan, as well as the relationship between Microsoft and the AI startup. The preliminary investigation is set to conclude on 11 September, following which the CMA will decide whether to proceed with a phase two investigation.
Josh Mesout, CIO of Civo, expressed concerns about the impact of powerful partnerships on the AI industry, highlighting the importance of preserving a diverse and competitive landscape to foster innovation and prevent monopolistic practices.
He urged regulators to closely monitor the partnerships between tech giants and AI startups to prevent potential market distortions and ensure a level playing field for all players in the industry.
