The UK’s Competition and Markets Authority (CMA) has concluded that Amazon’s significant investment into AI firm Anthropic does not warrant further investigation. According to the CMA, the deal does not meet the threshold for a “relevant merger situation,” citing Anthropic’s turnover in the UK as under £70 million and stating that the two companies combined do not control a 25% or greater market share in any product or service category in the country.
Amazon’s investment, which totals up to $4 billion, includes $1.25 billion injected in September 2023 and a further $2.75 billion committed by March 2024, with the possibility of converting this sum into equity if certain conditions are met.
As part of the deal, Anthropic has agreed to use Amazon Web Services (AWS) as its primary cloud provider for selected workloads. AWS will supply Anthropic with cutting-edge technology, including its proprietary Trainium and Inferentia chips, to assist in building, training, and deploying Anthropic’s AI models. These chips will be instrumental in Anthropic’s future AI developments.
In addition to its financial investment, Amazon secured consultation rights, which allow the company to advise Anthropic on key business matters. Amazon also obtained a “right of first notification” in the event of any change of control at Anthropic.
This partnership raised concerns about potential anti-competitive behavior, prompting the CMA to open an inquiry in August 2023. However, after reviewing the deal, the regulator found that it did not meet the criteria for an extended probe.
Interestingly, this is not the first time the CMA has taken a cautious yet lenient approach to major AI investments. In May 2023, the regulator made a similar decision regarding Microsoft’s partnership with Mistral AI, determining that it also did not qualify for further investigation.
Founded in 2021, Anthropic has rapidly positioned itself as a competitor to OpenAI’s ChatGPT with its own Claude AI models. In addition to Amazon, the company counts Google’s parent company Alphabet, Menlo Ventures, and Spark Capital among its investors.
With this clearance from the CMA, the Amazon-Anthropic deal will proceed without any further regulatory hurdles in the UK, reinforcing Amazon’s growing influence in the AI sector.
