UK Competition Regulators to Investigate Microsoft and Amazon AI Deals

British competition regulators declared on Wednesday that they will review recent artificial intelligence (AI) partnerships involving Microsoft and Amazon due to concerns that they might hinder AI competition.

The Competition and Markets Authority (CMA) will investigate Microsoft's engagement with French firm Mistral AI and its hiring of key staff from Inflection AI. The watchdog also investigated Amazon's $4 billion purchase of San Francisco-based AI startup Anthropic, according to an ABC News report.

Increasing public and business interest in AI technology has led major technology giants to invest extensively in generative AI startups. However, antitrust regulators are investigating these investments.The CMA said it would consult "interested third parties" before launching a full antitrust inquiry.

Its executive director of mergers, Joel Bamford, said, "We will assess, objectively and impartially, whether each of these three deals falls within U.K. merger rules and, if they do, whether they have any impact on competition in the U.K."

Concerned Big Tech Responds

Microsoft agreed to comply with the CMA, arguing that its talent acquisition and fractional investments in AI firms foster competition and are not mergers.

Microsoft hired Inflection's Mustafa Suleyman, co-founder of Google's DeepMind AI lab, to manage its consumer AI branch last month. MS partnered with Mistral earlier this year after it cooperated with OpenAI, the developer of ChatGPT, which is also under CMA review.Mistral pledged to work with the CMA throughout the inquiry to maintain its independence and market access.

Meanwhile, Amazon stated that it invested heavily in Anthropic to create foundation models for generative AI systems. The tech giant also called the CMA's investigation of its agreement with Anthropic "unprecedented," noting fundamental contrasts with usual AI startup-tech behemoth alliances.

According to an Amazon representative, the partnership with Anthropic requires a small investment and does not provide Amazon board director or observer status. In addition, Anthropic runs its models on several cloud providers, per NBC News.

"By investing in Anthropic, which has just released its industry-best, new Claude 3 models, we're helping make the generative AI segment more competitive than it's been the last couple of years," the rep said. the Amazon spokesperson noted that customers are enthused about the collaboration's prospects hopes the CMA resolves the matter soon.

A general view outside the Microsoft Experience Centre in Oxford Circus on April 26, 2023 in London, England.

CMA's Increased Scrutiny of Tech Giants

The CMA's swift probe of Microsoft and Amazon's AI cooperation shows the regulator's increased scrutiny of key US technology companies and its attempts to resolve competition concerns.

The CMA delayed Microsoft's acquisition of Activision Blizzard for months last year. The initial regulators were concerned that the merger would significantly limit competition. After Microsoft gave Ubisoft cloud rights for Activision games past and future, the CMA authorized the purchase.

Last month, TechTimes reported that CMA began investigating Vodafone and Three UK's merger, prompting Vodafone's CEO to call for regulatory change and industry engagement.

The CMA is concerned about the merger's potential to change market dynamics by merging two of the UK's leading mobile network operators. The unification would establish the UK's largest mobile phone operator with 27 million subscribers.

After a first-phase probe, the CMA highlighted concerns about the merger's impact on competition and consumer welfare such as increased mobile service costs and limited UK mobile network investment.