UK Government Approves Amazon-Anthropic Merger, Citing No Competition Concerns

"uk Government Approves Amazon-anthropic Merger, Citing No Competition Concerns",

UK Government Approves Amazon-Anthropic Merger, Citing No Competition Concerns

Home » News » UK Government Approves Amazon-Anthropic Merger, Citing No Competition Concerns
Table of Contents

Investigation into Amazon and Anthropic Partnership

The UK government has completed an inquiry into the collaboration between Amazon and Anthropic and determined that it does not qualify as a “relevant merger situation” exempt from competition regulations.

Despite granting Amazon certain privileges and involving joint efforts between the two companies, the partnership does not meet the requirements for a relevant merger as per UK law, as per the Competition and Markets Authority.

More specifically, the partnership falls short of the turnover threshold for a relevant merger, given that Anthropic’s turnover is below £70 million, as outlined in a summary of the decision. Additionally, the combined market control of the two companies does not exceed 25% in any sector in the country, thus not posing a significant competitive threat.

Consequently, the CMA concluded that Amazon lacks substantial influence over Anthropic and opted not to refer the partnership for further scrutiny.

Amazon’s Investment in Anthropic

In March, Amazon finalized its $4 billion (£3.16 billion) investment in Anthropic, the company responsible for the Claude LLM family, which competes with OpenAI’s ChatGPT and Google’s Gemini. Founded by former OpenAI executives Daniela and Dario Amodei, Anthropic agreed to utilize Amazon Web Services as its primary cloud provider for critical workloads and future model development.

As part of the investment deal, Anthropic agreed to employ Amazon’s Trainium and Inferentia chips for model development and deployment, hosting them on Amazon Bedrock, the AI app development platform.

Following concerns raised by the Competition and Markets Authority about a potential reduction in competition in the UK tech sector due to this partnership, an investigation was initiated.

Other CMA Investigations

The CMA launched an ongoing investigation into Google’s parent company, Alphabet, and their partnership with Anthropic, in which Google pledged up to $2 billion for the AI startup’s research and safety initiatives.

Microsoft’s hiring of Inflection AI co-founder Mustafa Suleyman and colleagues was also under CMA scrutiny, but the authority has now cleared the situation of competition concerns despite it meeting the criteria for a relevant merger.

Furthermore, the CMA is examining the Microsoft partnership with Mistral AI and the potential antitrust implications of the connection between Microsoft and OpenAI.

Reasons for CMA’s Scrutiny on Big Tech Firms

The CMA is investigating large tech firms’ engagements with AI startups to secure early control and capitalize on the AI industry’s growth. These partnerships, such as Microsoft and OpenAI, NVIDIA and Inflection AI, and Google and Anthropic, may lead to market dominance, hindering independent companies from obtaining funding, talent, or competing effectively.

Instead of full mergers, Big Tech opts for strategic investments in promising startups and talent acquisition to gain influence and access to innovative technologies without triggering regulatory scrutiny or antitrust actions.

Legal Framework and Future Actions

The CMA is striving to identify transactions where large tech companies shield themselves from competition in the UK, in line with the Enterprise Act 2002. The Digital Markets, Competition, and Consumers Bill grants the CMA new enforcement powers to ensure compliance with consumer protection laws and impose penalties on non-compliant firms.

Collaborating with international agencies, the CMA is committed to studying the competition landscape in the AI industry to promote fair and effective competition.

author avatar
roosho Senior Engineer (Technical Services)
I am Rakib Raihan RooSho, Jack of all IT Trades. You got it right. Good for nothing. I try a lot of things and fail more than that. That's how I learn. Whenever I succeed, I note that in my cookbook. Eventually, that became my blog. 
share this article.

Enjoying my articles?

Sign up to get new content delivered straight to your inbox.

Please enable JavaScript in your browser to complete this form.
Name