Syed Imran Haider 
A UK competition regulator is formally investigating the multi-billion dollar investment of Amazon into Anthropic.
On Thursday, the Competitions and Markets Authority announced that it had started ‘Phase 1’ of the investigation into the e-commerce giant’s investment and partnership with the US artificial-intelligence firm.
The Investigation
The regulator said that their goal was to determine if the could be a relevant merger situation that would inflict harm on competition in the United Kingdom.
The CMA had first scrutinized the Amazon and Anthropic tie-up. Now, it has ‘sufficient information’ to launch a formal investigation into the partnership.
The regulatory body now has 40 days to decide if competition in the UK could suffer due to the transaction.
If it deems so, then it would begin ‘Phase 2’ of the investigation, which would require an in-depth look into the matter.
In March, Amazon had made an investment in Anthropic worth $4 billion. The company had first purchased an equity stake in September worth $1.25 billion.
Then, it had conducted another transaction worth $2.75 billion this year. The deal dictates that Amazon’s Bedrock platform would offer Anthropic’s large language models.
The Deal
They will be used for developing generative AI applications. The powerful models will also be trained and deployed on the custom AI chips of Amazon itself.
The chips in question were developed by the cloud computing division of Amazon Web Services. A spokesperson for Amazon said that they were ‘disappointed’ that the CMA was moving forward with a ‘Phase 1’ probe.
The spokesperson added that their collaboration with Anthropic meets the threshold of the CMA and does not have any impact on competition.
According to the spokesperson, Amazon’s investment in Anthropic will help the latter expand competition and choice in this important market.
They revealed that Amazon’s investment does not give it any decision-making power or a seat on Anthropic’s board. The latter has multiple partners and is free to work with any provider they like.
They also said that Amazon would provide customers access to Anthropic’s models through Bedrock.
Anthropic’s Response
A spokesperson for Anthropic said that their company is independent. Their corporate governance independence is not compromised due to their investor relationships and strategic partnerships.
The spokesperson also asserted that Amazon does not hold a seat on their board and does not have any board observer rights.
They added that they were ready to cooperate with the CMA in its probe. They were ready to provide the regulator complete details of Amazon’s investment in Anthropic.
It is worth noting that regulators are not only scrutinizing the deal between Amazon and Anthropic. The CMA is also scrutinizing iMicrosoft’s investment and partnership with OpenAI.
However, the watchdog has not disclosed if it will begin a Phase 1 investigation into the OpenAI-Microsoft deal.
In January, the Federal Trade Commission (FTC) in the US, also sent notices to Amazon, Microsoft, Google, OpenAI and Anthropic.
The companies were asked to disclose details about their investments and partnerships.
