UK antitrust regulators have said they are conducting an early-stage investigation into Google's relationship with Anthropik after the Alphabet subsidiary made multiple investments in the US AI rival.
While it is not yet at the formal investigation stage, the Competition and Markets Authority (CMA) is inviting comments from interested parties and other “stakeholders” ahead of a final decision on whether the deal “results in the creation of a relevant merger situation” and whether this would lead to a “substantial lessening of competition” in the UK.
Founded in San Francisco in 2021, Anthropic develops AI systems with a focus on safety, transparency and risk mitigation, and is establishing itself as a Public Benefit Corporation (PBC) to differentiate itself from competitors. Anthropic is developing a Large Scale Language Model (LLM) and an associated chatbot called Claude that is comparable to OpenAI's ChatGPT and Google's Bard.
Anthropic has raised nearly $10 billion since it was founded, with Google reportedly investing an initial $300 million early last year, followed by another $2 billion, but it has also attracted all sorts of big-name investors, including Amazon, which pumped $4 billion into the emerging AI startup.
The move has prompted regulators to act, raising concerns that big tech companies are embracing new M&A techniques aimed at gaining greater control over younger innovators without the regulatory scrutiny that comes with full-scale acquisitions. These so-called “quasi-mergers” can involve hiring startup founders and technical talent or even making strategic investments.
The CMA revealed in April that it was investigating several similar transactions, including Microsoft's recent investment in French startup Mistral AI, but quickly concluded that the size of the investment meant that it was not subject to investigation under current merger regulations. The CMA is also looking into Amazon's ties with Antropic, and is expected to launch a separate full-scale investigation into Microsoft's close ties with ChatGPT maker OpenAI.
Earlier this month, the CMA also confirmed it was launching a full regulatory investigation into the company following its hiring of the core team from Inflection AI, a rival to OpenAI in which Microsoft had previously invested.
Starting today, interested parties can submit comments to the CMA through August 13, 2024, although there is no guarantee that the regulator will advance the matter to a formal “phase one” investigation. The decision may ultimately depend on the stake Google has acquired in the startup. If it is determined that the stake is a minority investment that does not give Google effective control over the startup, the CMA may reject the investment, as it did with Microsoft's investment in Mistral AI.
“We intend to work with the CMA to provide a full account of Google's investment and our commercial partnerships,” an Anthropic spokesperson said in a statement to TechCrunch. “We are an independent company, and our strategic partnerships and investor relationships do not compromise our corporate governance independence or freedom to partner with others. Anthropic's independence is a core characteristic essential to our public service mission and the ability to deliver our services wherever and however our customers access Claude.”
TechCrunch has reached out to Alphabet for comment and will update if we hear back.