Highlights:

  • The CMA has recognized a pattern of connections within the AI market, where approximately 90 partnerships have been established, describing it as an “interconnected web.”
  • The CMA is investigating if these partnerships qualify as mergers, considering their potential impact on the UK’s rapidly growing AI sector, which Microsoft has significantly bolstered through substantial investments.

The Competition and Markets Authority of the U.K. has inquired whether Microsoft Corp and Amazon.com Inc.’s AI partnership violates the country’s merger regulations.

The duo of technology behemoths has poured millions of dollars into numerous AI startups. This encompasses Microsoft’s recent collaboration with Mistral AI, a Paris-based startup founded by former employees of Meta Platforms Inc. and Google DeepMind, which already boasts a valuation exceeding USD 2 billion. Additionally, Microsoft has invested funds into Inflection AI Inc., another noteworthy player in the expansive landscape of large language models.

Amazon’s investments have been directed towards Anthropic, a company specializing in safety and research AI. Anthropic’s work ranges from research concerning AI-engineered dystopias to the development of a large language model praised for its “near-human levels of comprehension.” Recent reports indicate that the company’s large language models will soon be integrated into Amazon Web Services Inc.

The Competition and Markets Authority (CMA) stated that it is examining whether these collaborations can be categorized as mergers. The regulatory body will assess this in terms of how these partnerships could impact the rapidly expanding AI industry in the U.K., a sector that Microsoft has bolstered with significant investments.

The investigation will delve beyond those specific agreements. The CMA indicated that it has observed a pattern of connections within the AI market, where approximately 90 partnerships have been established, describing it as an “interconnected web.”

“Foundation models have the potential to fundamentally impact the way we all live and work, including products and services across so many U.K. sectors – healthcare, energy, transport, finance, and more. So open, fair, and effective competition in foundation model markets is critical to making sure the full benefits of this transformation are realized by people and businesses in the U.K., as well as our wider economy where technology has a huge role to play in growth and productivity,” said Joel Bamford, the CMA’s Executive Director of Mergers.

These partnerships have attracted attention in the United States as well. Earlier this year, the Federal Trade Commission initiated its own investigation into major tech companies and their investments in various generative AI firms.