The U.K.‘s antitrust authority has determined that Amazon‘s investment in AI startup Anthropic cannot be investigated under current merger rules due to the size and scope of the deal. This decision by the U.K. Competition and Markets Authority (CMA) comes six months after news broke of Amazon’s $4 billion investment in Anthropic, one of several well-funded AI startups. Anthropic, a three-year-old company that develops large language models and a chatbot called Claude, has raised a total of $10 billion, including investments from Google‘s parent company Alphabet.
The CMA has also launched an early-stage “invitation to comment” on Google’s investment in Anthropic, which is still pending. The CMA was initially examining whether Amazon’s partnership with Anthropic would give them significant control over the company. This is part of a larger trend in the AI industry, where critics argue that Big Tech companies are using a new M&A strategy to gain control over startups without fully acquiring them. This strategy, known as a “quasi-merger,” may involve hiring startup founders and talent or making strategic investments.
However, the CMA has determined that the partnership between Amazon and Anthropic does not meet the criteria for a “relevant merger situation” under the Enterprise Act 2002. This means that the CMA cannot assess whether Amazon has gained “material influence” over Anthropic. This is because Anthropic’s U.K. turnover does not meet the £70 million threshold for investigation, and the companies do not collectively hold a 25% or more share of the goods or services in question.
This investigation is one of many similar cases launched by the CMA in recent times. While the CMA cleared Microsoft’s acquisition of Inflection, it concluded that the deal was equivalent to a merger. Microsoft also avoided antitrust scrutiny for its investment in Mistral AI. The CMA also has an ongoing case against Microsoft’s close ties with OpenAI, but there has been no progress since the formal “invitation to comment” was launched last year.
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