U.K. to scrutinize recent AI deals

Competition watchdog seeking comments before deciding to investigate Microsoft, Amazon

British competition regulators said Wednesday they’ll scrutinize recent artificial intelligence deals by Microsoft and Amazon over concerns the moves could thwart competition in the AI industry.

The U.K. Competition and Markets Authority said it’s looking into Microsoft’s partnership with France’s Mistral AI and the company’s hiring of key staff from another startup, Inflection AI. The watchdog also separately announced it is investigating Amazon’s $4-billion (U.S.) investment in San Franciscobased Anthropic.

Big Tech companies have been pouring money into generative AI startups amid growing public and business interest in the technology, but the investments have also drawn attention from antitrust authorities.

The U.K. watchdog said it was seeking comments from “interested third parties,” before deciding whether to carry out an in-depth antitrust investigation.

“We will assess, objectively and impartially, whether each of these three deals fall within U.K. merger rules and, if they do, whether they have any impact on competition in the U.K.,” the watchdog’s executive director of mergers, Joel Bamford, said in a statement.

Microsoft said it will provide the watchdog with the information it needs to carry out its inquiries.

“We remain confident that common business practices such as the hiring of talent or making a fractional investment in an AI start-up promote competition and are not the same as a merger,” the company said.

Microsoft last month hired Mustafa Suleyman, who co-founded Google’s DeepMind AI research lab, to head up its consumer AI business, along with the chief scientist and several top engineers and researchers from Inflection, his AI startup.

Microsoft also teamed up earlier this year with Mistral, which has become France’s AI darling. That followed Microsoft’s previous existing partnership with ChatGPT maker OpenAI, which is also facing scrutiny from the CMA. Mistral said it’s “fully committed to co-operating with the CMA throughout this process to ensure that our long-term independence and access to the market are upheld.”

Amazon, meanwhile, has spent billions for a minority stake in Anthropic. The two companies are collaborating to develop so-called foundation models, which underpin the generative AI systems that have captured global attention.

“It’s unprecedented for the CMA to review a collaboration of this type,” Amazon said in a statement. “Unlike partnerships between other AI startups and large technology companies, our collaboration with Anthropic includes a limited investment, doesn’t give Amazon a board director or observer role, and continues to have Anthropic running its models on multiple cloud providers.”

The CMA said it’s stepping up its scrutiny of the market for foundation models after it published a report that highlighted the risk that powerful companies could use partnerships with key AI players to strengthen their positions.