Google is under investigation in the UK, again, for its dealings with AI startup Anthropic

The UK’s Competition and Markets Authority (CMA) has initiated a preliminary investigation into the partnership between Google and the AI startup Anthropic.

This is part of an ongoing scrutiny of the relationships between large tech firms and smaller AI companies. Google’s $2 billion investment in Anthropic, made in 2023, followed a cloud computing agreement with the startup, which is known for developing the Claude language model and chatbot.

The CMA is assessing whether this partnership constitutes a “relevant merger situation” that could warrant a formal investigation. The authority is currently inviting public comments over the next two weeks to gather more information.

This investigation occurs amidst growing concerns about competition in the generative AI sector. Another deal involving Anthropic, in which Amazon invested $4 billion and secured a cloud computing agreement, is also under CMA scrutiny. This could potentially be classified as a merger, prompting further regulatory review.

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The CMA has conducted similar investigations in the past. For instance, it looked into the partnership between Microsoft and OpenAI after Microsoft acquired a significant stake in OpenAI’s for-profit branch. Another investigation focused on Microsoft’s deal with the AI startup Inflection, following Microsoft’s acquisition of Inflection’s founder and leadership team and an agreement to access the startup’s AI models.

Regulatory authorities are increasingly vigilant about the concentration of power within big tech companies, especially in competitive sectors like AI. This has made outright acquisitions less common. Instead, regulators are focusing on partnerships and other arrangements that could potentially hinder competition.

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Anthropic has responded to the investigation by asserting its independence. A spokesperson for the company emphasized that the partnership with Google does not compromise its corporate governance or freedom to collaborate with other entities. Anthropic maintains that it remains an independent company despite its strategic partnerships and investor relationships.

Google, on the other hand, expressed its commitment to fostering an open and innovative AI ecosystem. The company highlighted that Anthropic is free to use multiple cloud providers and does not face any exclusive technology restrictions imposed by Google.

The CMA’s investigation into these partnerships underscores the ongoing regulatory efforts to ensure fair competition in the rapidly evolving AI industry. As large tech companies continue to invest in and partner with smaller AI startups, regulatory bodies are closely monitoring these relationships to prevent any potential anti-competitive practices.