CMA Investigates Amazon's Stake in Anthropic for Competition Concerns

The Competition and Markets Authority (CMA) of Britain has initiated an investigation into Amazon's recent merger with AI company Anthropic, assessing whether the deal contravenes the Enterprise Act of 2002. The inquiry will determine if Amazon's investment could lead to a significant reduction in competition within the UK market for goods and services. The first phase of the investigation is set to conclude by October 4, when the CMA will decide whether to advance to a more in-depth examination. Amazon announced in September 2023 its intention to invest $4 billion for a minority stake in Anthropic, framing the partnership as a "strategic collaboration." The tech giant plans to leverage its Amazon Web Services (AWS) cloud computing platforms to support Anthropic's development, particularly utilizing AWS's Trainium and Inferentia chips for building and deploying advanced AI models. Anthropic's flagship AI model, Claude, is noted for its capabilities in dialogue, creative content generation, and complex reasoning. The CMA's investigation follows its earlier notice in April, which invited feedback from stakeholders regarding the Amazon-Anthropic deal. This official inquiry marks a significant step in scrutinizing the implications of the merger on market competition. Additionally, the CMA is currently conducting a two-year investigation into the cloud computing sectors of both Amazon and Microsoft, who collectively hold a dominant 70-80% market share in the UK. As the investigation unfolds, the outcome could have substantial ramifications for Amazon's operations and the competitive landscape of the AI and cloud computing markets in Britain.