UK Investigates Amazon's Ties with Anthropic

The U.K. Competition and Markets Authority (CMA) has initiated a formal antitrust investigation into Amazon's recent $4 billion investment in AI startup Anthropic. Founded in 2021, Anthropic has positioned itself as a public benefit corporation, focusing on developing large language models and its chatbot, Claude, which competes with offerings from OpenAI and Google. The company has raised approximately $10 billion since its inception, highlighting the growing interest in AI technologies. Concerns have emerged regarding a trend among major tech companies, including Amazon, to engage in what is being termed a "quasi-merger" strategy. This approach involves making strategic investments in startups to gain control without triggering regulatory scrutiny associated with full acquisitions. The CMA is also investigating Microsoft's significant investments in OpenAI, as well as its recent acqui-hire of talent from Inflection AI, another competitor in the AI space. The CMA's investigation into Amazon and Anthropic will assess whether the investment qualifies under merger regulations and if it poses a risk to competition in the U.K. The authority has 40 working days to reach a decision, which could either approve the deal or escalate it to a more comprehensive investigation. Anthropic has maintained that its partnerships do not compromise its independence or ability to collaborate with other firms. As the CMA navigates these inquiries, the outcome could have significant implications for the future of tech investments and competition in the rapidly evolving AI sector. The decision is expected by early October.