The UK's Competition and Markets Authority (CMA) has initiated several investigations into deals between tech giants Microsoft and Amazon and various AI startups. These investigations aim to evaluate whether these partnerships adhere to UK merger regulations and their potential impacts on market competition.
The CMA is scrutinising Microsoft's interactions with AI startups Mistral AI and Inflection AI, as well as Amazon's financial involvement with Anthropic. The authority is inviting public comments to determine if these deals “fall within UK merger rules and the impact these arrangements could have on competition in the UK,” according to the CMA.
In 2022, both Amazon and Microsoft faced inquiries from the CMA regarding their dominance in the cloud services sector. Microsoft was also accused of implementing unfair licensing terms and engaging in anti-competitive practices within the European cloud market.
Earlier this month, the CMA expressed concerns that major cloud providers are selectively investing in startups while restricting other companies' access to essential computing resources and data needed to develop foundational AI models.
A detailed examination of the deals
The CMA is now closely examining specific transactions: Microsoft's £12.90 million investment in Mistral AI, its dealings with Inflection AI, including the recruitment of former Inflection AI employees, and Amazon's substantial £3.20 billion investment in Anthropic. Joel Bamford, the executive director of mergers at the CMA, stated that these investigations would assess “whether each of these three deals falls within UK merger rules and, if they do, whether they have any impact on competition in the UK.”
Bamford further highlighted the potential significant influence of foundational models on various critical UK industries, such as energy, transportation, finance, and healthcare. He stressed the importance of maintaining “open, fair, and effective competition in Foundation Model markets” to ensure that the transformative benefits of these technologies are fully realised by individuals, businesses, and the broader economy, particularly in sectors where technology plays a pivotal role in growth and productivity.
