Google-Anthropic partnership raises AI competition fears in the UK

Google’s partnership with GenAI startup Anthropic is raising eyebrows in the UK as the trend of big tech giants backing young AI companies continues.

The Competitions and Markets Authority (CMA) said on Tuesday that it’s collecting information on whether the partnership qualifies as a merger and negatively impacts UK competition.

In October, Google-parent company Alphabet reportedly committed $2bn to the San-Francisco based startup, which has developed ChatGPT rival Claude. This followed a prior $300 investment in return for a what was said to be a 10% stake.

The CMA is now asking “interested parties” to provide comments on the deal between the two companies by August 13. It will then decide whether to proceed with a formal investigation.

The regulator is also looking into Amazon’s $4bn investment in Anthropic, as well as Microsoft’s relationship with OpenAI. In addition, it has opened a formal probe into Microsoft, after it reportedly poached core team members from Inflection AI, another startup the company had previously invested in.

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In April, the CMA said it had uncovered an “interconnected web of over 90 partnerships and strategic investments” in the AI sector involving big tech companies. It expressed concerns that such deals could further amplify their existing market power across the entire foundational model value chain.

Last week, the CMA also partnered with antitrust regulators in the EU and the US in an effort to protect fair competition in AI. In a joint statement, the three agencies identified deals with key players as a major competition risk that can “steer market outcomes.”

“As an industry we should be cautious over powerful partnerships as they pose a threat to the entire ecosystem,” said Josh Mesout, Chief Innovation Officer of cloud computing startup Civo.

Mesout added that such threats range from unfair market practices to stifling innovation and limiting consumer choice. “We cannot surrender AI to a virtual monopoly before it has really started.”