The Competition and Markets Authority (CMA) has decided not to investigate Alphabet’s partnership with AI startup Anthropic under the merger rules of the Enterprise Act 2002.
In October 2023, Alphabet put $2 billion into Anthropic, which competes with OpenAI. Amazon also backed Anthropic with $4 billion. The CMA has growing concerns that big players like Google, Amazon, Meta, Microsoft, and Apple might squeeze out competition in the foundational AI model sector. They fear that partnerships between these tech giants and AI developers might limit choices and stifle competition.
In a related matter, the CMA investigated Microsoft hiring key staff from Inflection AI. They concluded that Inflection wasn’t a real threat to Microsoft’s consumer chatbots, which they developed with OpenAI.
Joel Bamford, an executive director at the CMA, shared on LinkedIn that their investigation showed Google doesn’t have the material influence over Anthropic’s commercial policy needed for a merger investigation. He believes this decision gives clearer direction for businesses and investors.
The CMA’s phase one findings indicated that they didn’t see evidence of Google exerting significant influence over Anthropic through their partnership. They examined Google’s impact at both the shareholder and board levels, including a look at Google’s own AI product, Vertex AI.
The CMA noted that Anthropic’s revenue is below the £70 million threshold they consider when deciding whether to pursue a deal investigation further. Because of this, they won’t continue down that path for now. However, they are considering whether to look into Amazon’s investment in Anthropic.
Experts in the industry feel more scrutiny is necessary regarding the foundational model market. Josh Mesout, chief innovation officer at Civo, commented that while the CMA opted against investigating the Anthropic-Alphabet connection, the concerns about market concentration in AI technology remain valid. He emphasized that relying too heavily on a few major firms could stifle innovation, limit consumer options, and create a situation that benefits only Big Tech. Without a formal investigation, it’s still up to everyone in the industry to ensure that the AI market stays fair, competitive, and open to ongoing advancements.