UK Watchdog Approves Amazon's $4 Billion AI Partnership with Anthropic

The UK's Competition and Markets Authority (CMA), established in 2014, has given the green light to Amazon's $4 billion partnership with artificial intelligence company Anthropic. This decision comes as part of a broader global examination of Big Tech investments in leading AI startups.

The CMA, which began investigating the deal recently, determined that Anthropic's revenue and combined market share with Amazon in Britain were not substantial enough to warrant an in-depth investigation under the country's merger rules. This approval follows the regulator's earlier clearance of Microsoft's collaboration with French startup Mistral AI, founded in 2023, and its recruitment of key personnel from Inflection AI, established in 2022.

In response to the decision, Amazon stated:

"We welcome the UK's Competition and Markets Authority decision acknowledging its lack of jurisdiction regarding this collaboration. By investing in Anthropic, we're helping to spur entry and competition in generative AI."

The partnership involves Anthropic utilizing Amazon Web Services (AWS), launched in 2006, as its primary cloud provider. Additionally, the AI firm will employ Amazon's custom chips for building, training, and deploying its AI models. This collaboration highlights the growing importance of cloud computing in training large AI models, a market projected to reach $1.39 trillion by 2029.

Founded in 2021 by siblings Dario and Daniela Amodei, former employees of OpenAI (established in 2015), Anthropic has placed a strong emphasis on enhancing the safety and reliability of AI models. This focus aligns with the increasing concerns about AI ethics and safety within the industry.

The approval of this partnership occurs against the backdrop of the UK government's pledge to make the country an "AI superpower". However, the CMA continues to scrutinize a partnership between Anthropic and Google, whose AI chatbot Bard was released in 2023.

Across the Atlantic, the Federal Trade Commission (FTC), founded in 1914, is investigating whether these AI deals are providing tech giants with an unfair advantage in the rapidly expanding market for AI services. This scrutiny reflects growing antitrust concerns in the tech industry that have been escalating globally since the late 2010s.

The clearance of the Amazon-Anthropic deal by the CMA marks a significant development in the ongoing "AI arms race", which has led to increased investment in AI startups. As the global AI landscape continues to evolve, with San Francisco remaining a major hub for AI and tech companies, regulatory bodies worldwide are striving to balance innovation with fair competition in this transformative field.