The U.K.’s Competition and Markets Authority, CMA has initiated preliminary investigations into the collaborative ventures and talent acquisitions involving tech giants Microsoft and Amazon, along with three AI startups. The probe aims to ascertain whether these activities violate merger regulations and potentially impact competition within the U.K. market.
- CMA invites comments on the partnerships between Microsoft / Mistral AI and Amazon / Anthropic and Microsoft’s hiring of former employees and related arrangements with Inflection AI
- CMA has not formed any conclusions on whether the deals fall within UK merger rules or raise competition concerns in the UK
This move by the CMA comes amidst heightened scrutiny surrounding Big Tech’s strategies in the AI sector. Critics argue that these conglomerates are utilizing what’s dubbed as “quasi-mergers” to sidestep regulatory oversight. Earlier this year, the Federal Trade Commission (FTC) launched similar inquiries into Alphabet, Amazon, and Microsoft’s investments in emerging AI firms, citing concerns over innovation distortion and fair competition.
Additionally, regulatory attention has also shifted towards “foundational models” – the core infrastructure upon which AI systems are built. These models, crucial for various applications across sectors, have raised concerns regarding competition dynamics and regulatory oversight.
AI Competition
Joel Bamford, Executive Director of Mergers at the CMA, emphasized the significance of fair competition in foundational model markets, stressing its pivotal role in unlocking the transformative potential of AI across diverse industries.
Notably, previous instances of partnerships involving major players in the foundation model arena have sparked concerns about potential anticompetitive behavior. While outright acquisitions draw regulatory scrutiny, partnerships, investments, and talent acquisitions present alternative avenues that warrant regulatory attention.
Microsoft’s past collaboration with OpenAI, notably its investment in the ChatGPT-maker, drew regulatory scrutiny. Similarly, Amazon’s recent investment in Anthropic, an AI company specializing in large language models, has raised eyebrows.
Both Microsoft and Amazon have expressed confidence in their practices, emphasizing that talent acquisitions and strategic investments foster competition and innovation without constituting mergers.
The CMA’s preliminary investigation, open for comment until May 9, marks the initial step in a potentially lengthy review process. Depending on the findings, a formal “phase 1” review may follow, engaging the involved companies directly. The outcome of this review will determine whether the partnerships qualify as relevant mergers, thereby shaping the future landscape of AI competition in the U.K.
For media enquiries, contact the CMA press office on 020 3738 6460 or press@cma.gov.uk.