Preliminary enquiries have been launched by the U.K.’s Competition and Markets Authority (CMA) to investigate the ties between Microsoft, Amazon, and a trio of AI startups. The CMA aims to determine whether these close-knit collaborations fall under its merger rules and if they could potentially impact competition in the U.K. market.
The move by the CMA is part of a larger effort to scrutinize the M&A activities of Big Tech companies, particularly in the field of artificial intelligence (AI). These companies have recently been employing a strategy known as “quasi-mergers” to bypass regulatory oversight.
One notable case that attracted the CMA’s attention was Microsoft’s investment in OpenAI, the creator of ChatGPT. The regulator issued a formal invitation for comments from stakeholders in the AI and business sectors. Microsoft further complicated matters when it hired the core team behind Inflection AI, a competitor to OpenAI that it had previously invested in. Additionally, Microsoft recently launched an AI hub in London, led by former Inflection and DeepMind scientist Jordan Hoffmann. These moves have raised concerns about potential anti-competitive practices.
Amazon has also been under scrutiny for its $4 billion investment in Anthropic, another AI company specializing in large language models. The CMA is evaluating whether these investments and partnerships could be seen as mergers and if they pose a threat to competition in the fast-growing AI industry in the U.K.
Joel Bamford, the CMA’s executive director of mergers, emphasized the importance of fair competition in foundation model markets. He noted that these models have the potential to significantly impact various sectors such as healthcare, energy, transport, and finance. Bamford stressed that ensuring open and effective competition is crucial for maximizing the benefits of this transformative technology for individuals, businesses, and the wider economy.
The CMA’s investigation highlights the need for regulatory oversight in the rapidly evolving AI industry. As AI continues to play a significant role in driving growth and productivity, it is essential to strike a balance between innovation and fair competition. The outcome of the CMA’s enquiries will shed light on the potential impact of these partnerships and investments on the U.K.’s AI landscape.