Amazon evades UK antitrust scrutiny over Anthropic investments

The UK antitrust watchdog has said Amazon’s partnership and equity investment in AI startup Anthropic cannot be investigated under current merger rules due to the size and scope of the deal.

The UK Competition and Markets Authority’s (CMA) announcement comes six months after news broke that Amazon had completed a $4 billion investment in Anthropic, one of several heavily funded artificial intelligence startups. The three-year-old company develops large language models (LLM) and an associated chatbot called Claude, which is roughly comparable to OpenAI’s ChatGPT or Google’s Bard.

San Francisco-based Anthropic, which has established itself as a public benefit corporation (PBC), has raised approximately $10 billion since its inception. In addition to the $4 billion from Amazon, Anthropic counts Google as a large investor, with more than $2 billion from its Alphabet subsidiary. The CMA also issued an early-stage “invitation to comment” on Google’s investment, which is still ongoing.

The CMA examined whether key aspects of the Amazon and Anthropic partnership would result in “Amazon having a material influence over Anthropic.” This is part of a growing trend in artificial intelligence in which critics say Big Tech is trying to take control of startups by taking a new approach to mergers and acquisitions that does not end with a full takeover. This so-called “quasi-merger” may involve hiring startup founders and talent or making strategic investments.

However, the CMA found that no “significant merger situation” had arisen under the provisions of the Enterprise Act 2002, meaning that it had not even reached the point where it could be assessed whether Amazon had acquired “material influence” over Anthropic. This is because Anthropic’s UK turnover does not exceed the £70 million threshold required to be included in the investigation and the companies collectively do not have a “25% or more” share of the supply of the goods or services in question.

“As we have made clear, Anthropic is an independent company, and our strategic partnerships and investor relationships do not impair our independence with respect to corporate governance or our freedom to collaborate with others,” an Anthropic spokesperson said in a statement to TechCrunch.

This investigation was one of a number of similar inquiries recently launched by the CMA. It recently approved Microsoft’s acquisition of Inflection, but said the deal amounted to a merger. Microsoft also avoided antitrust scrutiny over its purchase of shares in Mistral AI.

Moreover, the CMA has an ongoing case against Microsoft’s close ties to OpenAI – it issued a formal “invitation to comment” to interested parties last year, but there has been no progress since then.