The UK antitrust regulator will launch a formal investigation into Alphabet's $2.3 billion investment in Anthropic.
The competition regulator in the United Kingdom is examining whether Alphabet's $2.3 billion investment in the artificial intelligence startup Anthropic negatively affects competition in the country. The CMA will initiate...
The UK Competition and Markets Authority (CMA) is investigating Alphabet's investment in the artificial intelligence startup Anthropic. After opening a public comment period over the summer, the CMA announced on Thursday that it has "sufficient information" to begin a preliminary investigation into whether the purported $2.3 billion investment harms competition in UK markets.
The CMA divides merger inquiries into two phases: a preliminary exploration to assess whether there is enough evidence and a second optional phase, where it gathers as much evidence as possible. At the conclusion of the second phase, a regulatory outcome will be determined. This formal investigation will start on Friday, and by December 19, the CMA will decide whether to proceed to phase two.
Regarding Alphabet's investment, in 2023 it was reported that the company had invested $300 million in Anthropic, and later that same year, it indicated plans to back the AI startup with an additional $2 billion. Such situations are considered "quasi-mergers," where large tech companies control emerging startups through strategic investments and the hiring of founders and technical staff.
Meanwhile, Amazon has made an even larger investment in Anthropic, totaling $4 billion. After the initial public comment period, the CMA decided not to investigate that investment last month, noting that Amazon avoided the same situation as Alphabet in part due to current rules: Anthropic's revenue in the UK did not exceed £70 million, and the two parties did not account for 25 percent or more of the supply in the region (in this case, of LLMs and AI chatbots).
Although the CMA has not specified the details, it seems there was something in Alphabet's $2.3 billion investment in Anthropic that warranted a deeper review. This is relevant given that Google’s Gemini competes with Claude, and both companies are developing language models that serve small businesses and corporate clients.
