Amazon’s $4bn Anthropic investment faces UK merger probe

The CMA has until 4 October to decide if it will launch a more in-depth investigation into Amazon’s partnership with Anthropic.

The UK’s Competition and Markets Authority (CMA) has launched a merger inquiry into Amazon’s massive investments into AI start-up Anthropic due to competition concerns.

Amazon became a massive investor into the AI start-up last year when it shared plans to invest $4bn into the start-up, which is the creator of ChatGPT competitor Claude. This began with an initial investment of $1.25bn that gave the e-commerce giant a minority stake in the business.

Amazon followed this up in February with a $2.75bn investment, further boosting its minority ownership position. Other tech giants have gained a foothold into Anthropic, such as Google and Salesforce.

The CMA announced its concerns earlier this year and invited interested parties to comment on Amazon’s investments into Anthropic. The authority said it had concerns that the partnership may have resulted in a “relevant merger situation” and that that development could impact competition in UK markets.

The UK watchdog confirmed today (8 August) that it has “sufficient information” to launch a phase one investigation into this partnership. If sufficient evidence is found that the CMA’s concerns are valid, it can later launch a more in-depth phase two investigation.

The investigation will commence from tomorrow onwards and the CMA said it will announce its decision on conducting a deeper investigation by 4 October 2024.

As part of the deal between Anthropic and Amazon, the AI start-up said it will use AWS Trainium and Inferentia chips to build, train and deploy its future foundation models. The two will also work together on improving the chips in the future.

Amazon developers and engineers will also be able to build with Anthropic models via Amazon Bedrock so they can “incorporate generative AI capabilities into their work”.

The moves Amazon took to partner up with Anthropic are similar to the investments Microsoft made into OpenAI, the creator of ChatGPT. Microsoft reportedly invested billions of dollars to gain a minority stake in the business. The focus on AI helped propel the tech giant into becoming the most valuable company in the world for a time.

The CMA appeared to be on the road to investigating the partnership between Microsoft and OpenAI towards the end of 2023, but there have been no developments since then. The CMA has instead focused on the tech giant’s investments into other AI start-ups such as Inflection AI.

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