Britain's antitrust regulator has concluded that Amazon's partnership and equity investment in AI startup Anthropic cannot be investigated under current merger rules because of the size and scope of the deal.
The UK Competition and Markets Authority (CMA) announcement comes six months after news emerged that Amazon had completed a $4 billion investment in Anthropic, one of the most heavily funded AI-focused startups. It was then held the next day. The three-year-old company develops large-scale language models (LLMs) and a related chatbot called Claude, which is roughly comparable to OpenAI's ChatGPT and Google's Bard.
San Francisco-based Anthropic has established itself as a public benefit corporation (PBC) and has raised approximately $10 billion since its inception. Apart from the $4 billion from Amazon, Anthropic also counts Google as a major investor, with more than $2 billion from an Alphabet subsidiary. The CMA has also launched an early 'request for comments' on Google's investment, which is still pending.
The CMA was considering whether key aspects of the partnership between Amazon and Anthropic resulted in “Amazon having significant influence over Anthropic.” Critics say this is part of a growing trend in the AI space, where big tech companies are trying to dominate startups by adopting new M&A approaches that fall short of outright acquisitions. This so-called “quasi-merger” may involve hiring startup founders and talent, or making strategic investments.
However, the CMA said that no “relevant merger circumstances” had been created under the provisions of the Enterprise Act 2002, and that it was not even at the stage to assess whether Amazon had acquired “significant influence” over Anthropic. said that it had not been reached. This is because Anthropic's UK sales do not meet the £70 million threshold for inclusion in the investigation, and the two companies together do not “account for more than 25%” of the supply share of the goods and services in question.
This investigation was one of a number of similar investigations recently launched by the CMA. The company recently approved Microsoft's acquisition of Inflection, but concluded that the deal amounted to a merger. Microsoft also avoided antitrust scrutiny for its purchase of Mistral AI stock.
Separately, the CMA has a dispute over Microsoft's close relationship with OpenAI. The CMA launched a formal 'call for comments' to interested parties last year, but there have been no developments to report since then.