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UK Regulator Eyeing Microsoft and Amazon AI Deals UK Regulator Eyeing Microsoft and Amazon AI Deals
The UK’s Competition and Markets Authority (CMA) is intensifying scrutiny of Big Tech’s engagements with artificial intelligence start-ups.  According to the... UK Regulator Eyeing Microsoft and Amazon AI Deals

The UK’s Competition and Markets Authority (CMA) is intensifying scrutiny of Big Tech’s engagements with artificial intelligence start-ups.  According to the Financial Times, the regulator has announced preliminary steps toward launching investigations into several recent high-profile dealings involving tech giants like Microsoft and Amazon.

On Wednesday, the CMA called for public input on Microsoft’s recruitment of key personnel from Inflection AI and its minority stake in the French start-up Mistral, alongside Amazon’s significant $4 billion investment in Anthropic, a U.S.-based company and a strong competitor to OpenAI.

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This solicitation of opinions from competitors typically precedes a formal probe, underscoring the regulator’s concern about potential anticompetitive behavior in these strategic moves. The UK regulator has yet to decide if these actions comply with UK merger regulations or if they pose competition concerns within the country.

The broader issue is whether Big Tech’s dominance in computing power—crucial for training sophisticated AI models—might be leveraged unduly to influence AI start-ups desperately needing these resources.

Sarah Cardell, the chief of the CMA, emphasized the urgency of the situation, stating, “We are determined to apply the lessons of history,” referring to the monopolistic tendencies seen in the online advertising, cloud computing, and mobile industries, dominated by a handful of major U.S.-based companies.

The CMA’s recent report highlighted an “interconnected web” of over 90 partnerships and investments involving major firms like Google, Apple, Microsoft, Meta, Amazon, and Nvidia, which could lead to an over-dependence on these corporations.

Amazon criticized the CMA’s stance as unprecedented, especially regarding its expanded investment in Anthropic, which does not afford Amazon any board seats or require Anthropic to use its cloud services exclusively. “By investing in Anthropic, we’re helping make the generative AI segment more competitive than it’s been the last couple of years,” Amazon stated.

Similarly, Microsoft defended its practices, which included hiring Mustafa Suleyman, a notable AI figure from Inflection AI, and entering into a partnership with Mistral. “We remain confident that common business practices such as the hiring of talent or making a fractional investment in an AI start-up promote competition and are not the same as a merger,” Microsoft commented.

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Both AI start-ups involved, Mistral and Anthropic, have expressed intentions to cooperate with the CMA to preserve their market access and independence. Anthropic clarified, “We are an independent company and none of our strategic partnerships or investor relationships diminish the independence of our corporate governance or our freedom to partner with others.“.

As Big Tech firms increasingly invest in AI start-ups, the CMA’s investigations are set to determine the nature and impact of these deals.

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