UK Competition Regulator Investigates Google’s Relationship with AI Competitor Anthropic

The United Kingdom’s competition watchdog has initiated a preliminary examination of the relationship between Google and Anthropic, following multiple investments by the tech giant’s parent company Alphabet in the American AI company.

Currently, the Competition and Markets Authority (CMA) has not moved to a formal investigatory phase but is calling for input from stakeholders and other “interested parties” to determine if this collaboration constitutes a merger situation under regulation and whether it could significantly lessen competition within the United Kingdom.

Anthropic, launched in 2021 in San Francisco, concentrates on crafting AI systems centered on safety, clarity, and minimizing risks, and has emerged as a public benefit corporation (PBC) to differentiate itself from competitors. Its offerings include sophisticated language models (LLMs) and a conversational AI named Claude, which rivals products like OpenAI’s ChatGPT and Google’s Bard.

Since its establishment, Anthropic has amassed nearly $10 billion in investments. Google’s initial venture included contributing approximately $300 million, with an additional $2 billion following thereafter. Among its other prominent backers is Amazon, which has invested a hefty $4 billion into the developing AI enterprise.

The influx of investment from major tech entities has prompted regulatory bodies to examine these strategic alliances, with a particular focus on whether these “quasi-mergers” provide tech giants a level of influence over innovative startups without invoking the typical regulatory oversight associated with complete acquisitions. This strategy may involve the acquisition of startup talent or making pivotal financial injections.

In April, the CMA disclosed its investigation into several analogous dealings, such as Microsoft’s capital injection into French company Mistral AI, which ultimately did not meet the criteria for further examination under existing merger guidelines. The CMA’s scrutiny also extends to Amazon’s relationship with Anthropic, and a comprehensive investigation into Microsoft’s partnership with OpenAI, the maker of ChatGPT, is anticipated.

Additionally, the regulatory body has confirmed its intention to conduct an extensive examination of Microsoft following its absorption of the primary team from Inflection AI, another competitor to OpenAI, and a prior investment target of Microsoft.

Interested stakeholders have a window until August 13, 2024, to submit their comments to the CMA, although it remains uncertain whether these findings will prompt a “phase 1” investigation. The outcome will significantly depend on the extent of Google’s acquired interest in Anthropic, particularly if it’s deemed a minority stake without substantial influence over the company’s operations, mirroring the conclusion drawn with Microsoft’s venture into Mistral AI.

“Our intention is to fully cooperate with the CMA and furnish a detailed account of Google’s investment and our joint ventures,” remarked a representative from Anthropic, as conveyed to TechCrunch. “We maintain our autonomy as a company, assuring that neither our strategic alliances nor investor relationships infringe upon the independence of our corporate governance or our capability to collaborate with other entities. At the heart of Anthropic lies our independence, crucial for our public benefit objectives and our commitment to providing our clients access to Claude in the manner most convenient to them.”

TechCrunch has sought a response from Alphabet regarding these developments and awaits reply.