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UK Clears Google’s AI Investment in Anthropic, No Antitrust Probe

By  |  November 19, 2024

In a significant decision for Google’s business interests in artificial intelligence, U.K. antitrust officials have decided not to pursue an in-depth probe into the tech giant’s partnership with San Francisco-based AI startup Anthropic. The decision, announced by the Competition and Markets Authority (CMA), relieves Google of the pressure to further justify its relationship with the emerging AI company, according to The Wall Street Journal.

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    In October, the CMA had launched a preliminary review to determine if Google’s financial stake in Anthropic might undermine fair competition within the U.K. The CMA examined whether Google’s investment and partnership with the startup would allow the tech giant to exert an excessive influence over Anthropic’s operations. Ultimately, officials decided that the relationship does not meet the criteria for an extended investigation under the nation’s merger regulations, per The Wall Street Journal.

    The move follows a formal “stage 1” probe initiated by the CMA in October, focusing on Alphabet’s—the parent company of Google—investment strategy in Anthropic. Anthropic, founded three years ago, has gained recognition for developing large language models (LLMs) and its Claude chatbot, a platform rivaling Google’s own AI-powered system Gemini (formerly Bard) and OpenAI’s popular ChatGPT. Alphabet’s relationship with Anthropic includes a substantial financial commitment; the company reportedly invested $300 million in the startup last year and later added a further $2 billion to support its growth.

    Read more: US Supreme Court Declines to Hear States’ Appeal in Google Antitrust Case

    Anthropic has also attracted interest from other tech leaders, with Amazon making a notable $4 billion investment in the company. The CMA previously evaluated Amazon’s stake in Anthropic as well, concluding in September that the deal fell outside the scope of U.K. merger regulations. This decision marked another example of the regulatory scrutiny surrounding major tech firms’ partnerships with smaller, innovative companies. Regulators have expressed concerns that such relationships, often referred to as “quasi-mergers,” could lead to substantial influence without formal acquisitions. According to The Wall Street Journal, authorities fear that this trend might allow big tech companies to subtly control startup innovation through board influence, financial stakes, or resource sharing arrangements.

    For Google, the CMA’s final decision underscores the agency’s view that the company’s partnership with Anthropic does not pose a risk to competition in the U.K. The CMA clarified that Google’s role does not include “material influence” over Anthropic, meaning it cannot wield control at the board level or through dependence on its technological infrastructure, like cloud computing. After careful review, regulators decided that these factors were not sufficient to necessitate a further probe.

    This outcome may signal a cautious but positive outlook for big tech companies seeking collaborative investment in AI startups without triggering extensive regulatory hurdles.

    Source: The Wall Street Journal