Amazon’s $4 billion AI investment under UK scrutiny

The UK’s Competition and Markets Authority (CMA) has launched a formal antitrust investigation nto Amazon’s $4 billion investment in AI startup Anthropic. This follows recent scrutiny of Google’s ties with the same company, as concerns grow over Big Tech’s strategic investments in AI firms. The CMA’s investigation will determine whether Amazon’s stake in Anthropic could harm competition within the United Kingdom, despite the e-commerce giant not holding a majority stake or board seat in the startup.

Anthropic, established in 2021 and known for developing large language models like its chatbot Claude, has raised $10 billion so far. Its public benefit corporation status is intended to distinguish it from rivals in the AI space. Despite Amazon’s significant investment, Anthropic maintains that its strategic partnerships do not compromise its independence or ability to collaborate with other companies. The CMA has 40 working days to decide whether to advance the investigation to a more in-depth phase.

The CMA’s move comes amid increasing concerns about Big Tech companies adopting a ‘quasi-merger’ approach to avoid full acquisitions, which would likely face greater regulatory scrutiny. The regulator has also been examining similar deals, including Microsoft’s investments in AI startups like OpenAI and Mistral AI. The outcome of the CMA’s probe into Amazon’s investment in Anthropic could have broader implications for how tech giants are regulated in their acquisition strategies.

Amazon’s investment is part of a wider trend in which leading tech companies are securing stakes in promising AI startups to ensure they stay ahead in the rapidly evolving AI sector. With the CMA’s investigation underway, the regulatory landscape for these types of deals is expected to become more stringent, potentially reshaping future investment strategies in the AI industry.