UK Competition Regulators Probe Microsoft and Amazon AI Deals

LONDON - The United Kingdom's competition regulators have their sights set on recent AI developments, as they announced on Wednesday a new probe into the actions of tech giants Microsoft and Amazon. This investigation comes amid concerns that the companies' recent activities could potentially suppress the competitive nature of the AI industry.

Investigation Targets AI Partnerships

The Competition and Markets Authority (CMA) is delving into Microsoft's engagement with French firm Mistral AI and their recruitment of essential personnel from another AI startup, Inflection AI. In a similar vein, they are also examining Amazon's hefty $4 billion investment in the US-based company Anthropic, eyeing the possibility that such moves by large tech corporations could limit competition within the sector.

Antitrust Authorities on High Alert

Massive investments into generative AI startups have become commonplace for Big Tech, propelled by the technology's growing popularity among the public and businesses alike. However, these financial manoeuvres have not slipped past antitrust authorities, who remain vigilant against possible monopoly practices.

The CMA has made a call for input from 'interested third parties' and is pondering the need for a comprehensive antitrust investigation. 'Objective and impartial assessment' is at the forefront of their process, aiming to ascertain whether these deals align with UK merger regulations and their impact on competition, said Joel Bamford, CMA's mergers executive director.

Companies Respond to the Scrutiny

Microsoft and Amazon have issued statements in response to the probe. Microsoft has expressed its confidence, asserting that its actions, such as talent acquisition and minor investments in AI startups, foster competition rather than act as mergers. Last month, they welcomed Mustafa Suleyman, a former Google DeepMind co-founder, alongside top talents from his AI firm, Inflection. Microsoft had earlier partnered with Mistral, fresh after its alliance with ChatGPT creator OpenAI, which is also under the CMA's watchful eye.

Amazon, on the other hand, clarified the nature of their collaboration with Anthropic, emphasizing its differences from other tech partnerships and their investment's limitations. Unlike others, Amazon does not obtain a board position, and Anthropic continues to operate its AI models across various cloud platforms.

Future of AI Market Regulation

The UK watchdog is escalating its focus on the foundation models market, a critical layer in generative AI systems that have caught global attention. This action follows a CMA report highlighting the risk of dominant entities using partnerships to amplify their market power. Now all eyes are on the CMA as they decide the future course of competition in the fast-evolving world of artificial intelligence.

Microsoft, Amazon, Regulation