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UK Competition Authority Investigates Alphabet’s Investment in Anthropic
The UK’s competition authority is currently examining Alphabet’s substantial investment in the AI startup, Anthropic. Following a public comment period initiated this summer, the Competition and Markets Authority (CMA) announced on Thursday that it has gathered “sufficient information” to commence an initial investigation into whether Alphabet’s reported $2.3 billion investment in the Claude AI chatbot developer could negatively impact competition within UK markets.
Investigation Process Overview
The CMA conducts its merger investigations in two distinct phases: an initial assessment to determine if there is adequate evidence for further inquiry, followed by a potential second phase where comprehensive evidence is collected. The final decision regarding regulatory action will be made after this second stage.
This formal investigation will begin on Friday, with a deadline of December 19 for the CMA to decide whether to escalate to a phase two inquiry.
Responses from Involved Parties
Engadget has reached out for comments from both Google and the CMA and will provide updates as more information becomes available.
Investment Context and Comparisons
TechCrunch reports that earlier in 2023, Alphabet initially invested $300 million into Anthropic, later increasing its backing by an additional $2 billion later that same year. Such scenarios are often referred to as ”quasi-mergers,” where affluent tech firms gain significant influence over emerging startups through strategic financial support and recruitment of key personnel.
A notable competitor, Amazon, has made even larger investments into Anthropic—totaling around $4 billion. After reviewing public comments regarding Amazon’s involvement with Anthropic last month, the CMA opted not to pursue an investigation into that particular investment. The authority indicated that Amazon was able to avoid scrutiny partly due to existing regulations: at the time of review, Anthropic’s turnover in the UK was below £70 million and neither company accounted for 25% or more of market supply concerning AI large language models (LLMs) or chatbots.
The Competitive Landscape
While specific details remain undisclosed by the CMA regarding why Alphabet’s $2.3 billion stake warranted deeper examination compared to Amazon’s involvement, it is clear that Google’s Gemini competes directly with Claude AI. Both companies develop large language models aimed at serving small businesses as well as enterprise clients.
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