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Britain’s competition watchdog has taken the first steps in three further investigations into alliances between Big Tech companies and artificial intelligence startups after the agency said its concerns about dealmaking in the fast-growing sector were growing.
The Competition and Markets Authority on Wednesday called for comments on Microsoft’s hiring of key talent from Inflection AI and its minority stake in French start-up Mistral, as well as Amazon’s $4 billion investment in US company Anthropic, a leading competitor OpenAI.
Obtaining the opinions of competitors is a necessary prerequisite for a formal investigation. The CMA said it had not yet determined whether the deals would fall under UK merger rules or raise competition concerns in the UK.
Regulators worry that Big Tech companies could exploit AI companies’ insatiable need for computing power to train large language models by luring cash-strapped startups to their cloud services in exchange for a stake that gives them an outsized stake Young companies could often gain influence.
The CMA is already probing Microsoft’s $13 billion investment in OpenAI, a deal that has also attracted the attention of antitrust regulators in the US and Europe.
Microsoft, which participated in a $1.3 billion funding round for Inflection last year, hired the startup’s chief executive Mustafa Suleyman, co-founder of Google’s DeepMind, in March, among several other team members. The move came after Microsoft entered into a “multi-year partnership” with Mistral, a year-old AI startup, in February.
Amazon last month expanded its existing investment in Anthropic, maker of the Claude AI system. Anthropic had previously received funding from Google.
In a paper this month, the CMA said it had found an “interconnected web” of more than 90 partnerships and investments involving the same six major tech groups – Google, Apple, Microsoft, Meta, Amazon and chip maker Nvidia – resulting in There is a risk of “over-dependence on a handful of large companies”.
Sarah Cardell, the chief executive of the CMA, said the regulator was “determined to learn the lessons of history” after a small number of mainly US-based companies dominated the online advertising, cloud computing and mobile industries.
Amazon, which previously clashed with the CMA over its minority stake in British food delivery service Deliveroo, responded to the regulator’s latest possible intervention.
“It is unprecedented for the CMA to consider a collaboration of this nature,” Amazon said, citing a “limited investment” in Anthropic that does not grant it seats on the board or require the start-up to use only its cloud computing service to use. “By investing in Anthropic. . . We are helping to make the generative AI segment more competitive than in recent years.”
Microsoft, which spent most of last year fighting the CMA over its acquisition of Activision Blizzard, noted that it was unusual for the agency to consider a deal that was about staffing rather than a full-blown deal Fusion would work.
“We remain confident that common business practices such as hiring talent or making a partial investment in an AI startup promote competition and are not the same as a merger,” Microsoft said. “We will provide the UK Competition and Markets Authority with the information it needs to complete its investigation expeditiously.”
Mistral said it would work with the CMA “to ensure our long-term independence and market access is maintained” and said it was committed to “promoting fair competition, openness and transparency.”
Anthropic said the company also intends to work with regulators and “provide them with a complete picture of Amazon’s investment and our commercial cooperation.”
“We are an independent company and none of our strategic partnerships or investor relationships affect the independence of our management or our freedom to work with others,” it added.