UK Investigates Alphabet Partnership With AI Firm Anthropic

The British competition regulator’s scrutiny of the AI sector and AI Foundation Models takes a fresh turn this week, with another AI deal being investigated.

The Competition and Markets Authority (CMA) announced on Tuesday it is “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 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”

It has invited feedback and comments on the partnership from any interested party, with the deadline on feedback being 13 August 2024.

Google, Anthropic

It was back in February 2024 when it was revealed 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.

Google’s arrangement with Anthropic similarly includes a large cloud services contract, but apparently did not mean that Anthropic has to 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 firm.

In September 2023 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.

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.

Comments and feedback are also being sought over Microsoft’s hiring of former employees and related arrangements with Inflection AI.