The U.K. government has launched a preliminary investigation into the partnership between Amazon and Anthropic to see if it will significantly lessen competition. This comes days after a similar probe was announced into Alphabet’s collaboration with the AI startup.
In March, Amazon concluded its $4 billion (£3.16 billion) investment in Anthropic, the company behind the Claude LLM family, some of the only viable competitors to OpenAI’s ChatGPT and Google’s Gemini. It was founded by former OpenAI employees, including siblings Daniela and Dario Amodei, who were both execs.
In return for the investment, Anthropic committed to using Amazon Web Services as its primary cloud provider for “mission critical workloads, including safety research and future foundation model development.” It also agreed to use Amazon’s Trainium and Inferentia chips to build, train, and deploy its models and host them on the AI app development platform Amazon Bedrock.
However, the Competition and Markets Authority believes that this partnership could result in a “substantial lessening of competition” within the U.K. tech markets.
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Complete mergers and acquisitions often trigger extensive regulatory scrutiny and potential antitrust actions for this reason, which can delay or block proceedings. To avoid this situation, Big Tech instead makes strategic investments in the most promising startups and hires their top talent, allowing them to gain influence and access to innovative technologies unchecked.
In an April report on how the CMA is looking into AI foundational models, the CMA said, “Without fair, open, and effective competition and strong consumer protection, underpinned by these principles, we see a real risk that the full potential of organisations or individuals to use AI to innovate and disrupt will not be realised, nor its benefits shared widely across society.
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The CMA is looking to identify “relevant merger situation(s)” that allow large tech companies to “shield themselves from competition” in the U.K. It says that “a range of different kinds of transactions and arrangements” could represent a relevant merger with the provisions of the Enterprise Act 2002.
The Digital Markets, Competition, and Consumers Bill that was passed in May also “anticipates new powers for the CMA.” According to the April report, the CMA can “enforce consumer protection law against infringing firms” and apply non-compliance penalties of up to 10% of a firm’s worldwide turnover.
“We are ready to use these new powers to raise standards in the market and, if necessary, to tackle firms that do not play by the rules through enforcement action,” it said.
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Source: Amazon-Anthropic Merger Investigated by UK Government
Robin Edgar
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