CMA Begins Probe Into Alphabet Partnership With Anthropic

The British competition regulator’s scrutiny of the AI sector and AI Foundation Models continues this week, with the start of another investigation.

The Competition and Markets Authority (CMA) had said in July it was “considering whether it is or may be the case that Alphabet’s partnership with Anthropic has resulted in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002.

It then invited feedback and comments on the partnership from any interested party, but now on Thursday this week the CMA announced it will begin an Phase 1 investigation, and on 19 December 2024 will state whether the probe revealed enough to justify a full Phase 2 investigation.

Alphabet, Anthropic

The CMA scrutiny comes after it was revealed in February 2024 that Google’s parent Alphabet had invested about $300 million (£249m) in Anthropic, as investment in the sector heated up following the runaway success of Microsoft-backed OpenAI and its ChatGPT generative text tool.

In 2023 Anthropic had reportedly said it had secured a $500 million investment from Alphabet, which promised to invest another $1.5 billion over time.

Google’s arrangement with Anthropic includes a large cloud services contract, but apparently this does not mean that Anthropic has to only use Google’s cloud services.

This may be due to the fact that Anthropic has received larger amounts of funding from another big name tech firms.

In September 2023 for example, Amazon made an initial investment of $1.25 billion in Anthropic, but also stated it had plans to invest up to $4 billion.

Then in March 2024 Amazon pumped an additional $2.75 billion into San Francisco-based Anthropic, completing its $4 billion investment.

Founded in 2021 by former OpenAI executives, including siblings Daniela and Dario Amodei, Anthropic in January 2024 had released a limited test of a chatbot named Claude that offers features similar to ChatGPT.

Then in June Anthropic launched an updated AI model (Claude 3.5 Sonnet) as well as a new layout to boost user productivity.

AI scrutiny

The AI sector has been attracting the attention of the British competition regulator for a while now.

Last year the CMA confirmed it was investigating Foundation Models (FMs), as the market continues to develop at a “whirlwind pace”.

That investigation in September 2023 identified risks associated with AI FMs, and proposed seven guiding principles for the foundation models that underpin AI systems.

Then in April 2024 the CMA announced it had “real concerns” with AI Foundation Models (FMs) that are controlled by a small number of tech firms.

The CMA said at the time that it had identified an “interconnected web of over 90 partnerships and strategic investments involving the same firms: Google, Apple, Microsoft, Meta, Amazon, and Nvidia (the leading supplier of AI accelerator chips).”

Shortly after this, the CMA invited interested third parties, to comment on the partnerships between Microsoft and Mistral AI, as well as Amazon and Anthropic.

Last month the CMA cleared Amazon’s $4 billion (£3bn) investment into Anthropic, saying the deal does not meet its threshold for a more in-depth review.