The UK’s competition regulator is investigating Alphabet’s investment in AI startup Anthropic. After opening public comments this summer, the Competition and Markets Authority (CMA) said on Thursday it has “sufficient information” to launch a preliminary investigation into whether Alphabet’s alleged $2.3 billion investment in the cloud AI chatbot maker harms competition in UK markets.
The CMA divides its merger investigations into two phases: an initial scan to determine if there’s enough evidence to investigate in-depth and an optional second phase where the government gathers as much evidence as possible. After the second phase, it ultimately decides on a regulatory outcome.
The investigation will formally begin on Friday. By December 19, the CMA will decide whether to move to a Phase 2 investigation.
Google told Engadget that Anthropic is not limited to its cloud services. “Google is committed to building the most open and innovative AI ecosystem in the world,” a company spokesperson wrote in an email. “Anthropic is and does free to use multiple cloud providers, and we do not ask for exclusive technical rights.” Engadget also contacted the CMA for comment, and will update this story if we receive a response.
TechCrunch notes that Alphabet reportedly invested $300 million in Anthropic through early 2023. Later that year, it said it would back the AI startup with an additional $2 billion. Situations like these can be classified as “quasi-mergers,” where wealthy tech companies take control of emerging startups through strategic investments and hiring away founders and tech staff.
Amazon has invested even more in Anthropic: $4 billion. After an initial public comment period, the CMA declined to investigate that investment last month. The CMA said Amazon avoided Alphabet’s fate at least partly because of its existing rules: Anthropic’s UK turnover did not exceed £70 million, and the two parties did not combine to account for 25 per cent or more of the sector’s supply (in this case, AI LLMs and chatbots).
Although the CMA doesn’t explain, Alphabet’s $2.3 billion Anthropic investment is something to dive into deeper. Of course, Google’s Gemini competes with the cloud, and both companies build large language models that they offer to small businesses and enterprise customers.