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Brazil Launches Antitrust Investigations into Big Tech AI Acquisitions

By  |  August 28, 2024

Brazil’s Administrative Council for Economic Defense (CADE) has initiated multiple investigations into recent AI acquisitions by major technology companies, including Amazon, Microsoft, and Google. These investigations focus on the companies’ purchases of artificial intelligence startups, a move that has raised concerns among regulators worldwide.

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    According to The Brazilian Report, CADE’s investigations, which began in recent weeks, are centered around Amazon’s acquisition of Anthropic, Microsoft’s purchase of Mistral AI and Inflection AI, and Google’s acquisition of Character AI. The Brazilian antitrust body is looking into whether these companies adhered to the mandatory notification procedures required by Brazilian law when making these deals. If the acquisitions are found to have been completed without proper notification, the companies could face fines and administrative proceedings, potentially requiring them to submit the deals for further review by the regulatory authority.

    These investigations are part of a broader global scrutiny of big tech’s rapid expansion into the AI sector. Regulators in the United States and Europe have also taken notice, with several opening their own investigations into these acquisitions. There is growing concern that some of these deals might be structured to appear as straightforward investments rather than full acquisitions, a strategy that could potentially bypass certain regulatory requirements.

    Read more: UK Passes Digital Markets, Competition Bill to Curb Big Tech

    In the United Kingdom, the Competition and Markets Authority (CMA) has already launched a formal investigation into Amazon’s merger with Anthropic. The CMA revealed earlier this month that it had gathered enough information to justify the investigation and is expected to decide by October 4 whether to escalate the inquiry to a more in-depth phase. Amazon has so far invested $4 billion into Anthropic, signaling the significant stakes involved in this deal.

    The CMA is also investigating Microsoft’s acquisition of employees and technology from Inflection AI. In March, Microsoft paid $650 million for this acquisition, which included the hiring of Inflection AI’s CEO, Mustafa Suleyman, a co-founder of Google’s DeepMind. The CMA is anticipated to announce on September 11 whether this case will proceed to a more advanced stage of investigation.

    Microsoft’s activities in the AI sector do not end there. Paris-based Mistral AI, another startup under scrutiny, has received support from Microsoft and other major investors. The company secured $600 million in funding in June, although Microsoft, which had previously invested €15 million in Mistral as part of a business partnership, did not participate in this latest round.

    Google, meanwhile, has been making headlines with its acquisition of the co-founders of Character.AI, Noam Shazeer and Daniel De Freitas, along with the licensing of the startup’s chatbot technology, known for mimicking celebrities. This deal is reportedly worth $2.5 billion, which will be distributed among the co-founders and other stakeholders.

    Source: The Brazilian Report