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The UK’s Competition and Markets Authority Investigation
The Competition and Markets Authority (CMA) in the UK has initiated preliminary steps to investigate recent partnerships within the top AI sector players, according to an official release on April 24.
The CMA has requested feedback on specific partnerships, including Microsoft’s collaboration with Mistral AI, Amazon’s partnership with Anthropic, and Microsoft’s hiring and licensing deal with Inflection AI.
The primary objective of the antitrust agency is to evaluate whether the activities of each company comply with UK merger regulations and assess their potential impact on competition. Joel Bamford, the Executive Director of Mergers, underlined the agency’s commitment to conducting an evaluation “objectively and impartially.”
As per a previous report, the CMA highlighted a network of over 90 partnerships and strategic investments, suggesting that some of these collaborations may not adhere to merger rules.
Review Process
The current invitations to comment by the CMA do not mark the beginning of a formal review. The agency has not formulated any definitive conclusions and may not possess the jurisdiction to take further action. The comment period is set to conclude on May 9.
Company Responses
Several companies implicated in the review have pushed back against the regulator’s actions, particularly concerning the nature of their partnerships.
Amazon, responding to CNBC, labeled the review as “unprecedented” for partnerships like theirs and underscored that it made a limited investment in Anthropic without obtaining a board seat or observer role. Moreover, Anthropic relies on multiple cloud service providers besides Amazon Web Services for its operations.
Anthropic, in a separate statement to CNBC, emphasized its autonomy from Amazon and expressed willingness to collaborate with the CMA by providing requested information.
Microsoft, while addressing CNBC, expressed confidence that its hiring and fractional investments were distinct from actual mergers. The company assured that it would furnish the CMA with the necessary details.
Original Partnerships
Amazon announced a $4 billion partnership with Anthropic in March, while Microsoft finalized a $16 million investment in Mistral in February.
The CMA detailed the computer resource sharing and business dimensions of each partnership, with specific mention of the financial aspects of Amazon’s collaboration with Anthropic.
In another deal, Microsoft entered into a licensing arrangement with Inflection in March, coinciding with the hiring of Inflection’s co-founder Mustafa Suleyman and several other employees. The deal size was estimated at $650 million.
Microsoft’s extensive partnership with OpenAI was also highlighted. The CMA had initiated a comment period on this collaboration in December 2023, which concluded in January without leading to an investigation.
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