The UK competition watchdog is intensifying its examination of major tech companies’ involvement in artificial intelligence (AI) startups, with a particular focus on Microsoft and Amazon. The Competition and Markets Authority (CMA) has requested feedback on three transactions involving Microsoft and Amazon, paving the way for a potential formal investigation.
Microsoft’s investment in French company Mistral, the hiring of DeepMind co-founder Mustafa Suleyman to lead its new AI division, and Amazon’s $4 billion investment in US AI firm Anthropic are all under scrutiny. The CMA is concerned that these partnerships may be granting big tech firms undue influence over potential competitors, hindering competition in the market.
Sarah Cardell, CEO of the CMA, has expressed worries about the state of the AI industry and identified Google, Microsoft, Meta, Amazon, Apple, and Nvidia as central players in a network of AI collaborations. The CMA is set to conduct a phase one investigation to determine if the deals meet UK merger regulations and pose competition concerns. If necessary, a phase two investigation may follow, potentially resulting in remedies being imposed on the companies involved.
Microsoft’s recent investments in Mistral and Inflection AI, as well as Amazon’s partnership with Anthropic, have attracted regulatory attention. Both companies have pledged to cooperate with the CMA’s inquiries. Microsoft defends the partnerships as typical business practices around talent acquisition and strategic investments, arguing they do not equate to mergers. Amazon highlights the unique nature of its deal with Anthropic, contrasting it with other tech collaborations.
The CMA’s move signals a proactive stance on monitoring the AI sector, reflecting its commitment to ensuring fair competition. Industry experts welcome the watchdog’s intervention, emphasizing the significance of early regulatory involvement in the evolving AI landscape. As the investigations progress, the outcomes could have far-reaching implications for the future of AI collaborations between big tech firms and startups.
