Microsoft and Amazon under UK spotlight for AI investments

The UK’s Competition and Markets Authority (CMA) has intensified its scrutiny of major tech players’ involvement in AI startups, targeting Microsoft and Amazon in particular. The CMA is examining Microsoft’s investment in Mistral and the hiring of Mustafa Suleyman, DeepMind’s co-founder, for its new AI division. Similarly, it scrutinises Amazon’s $4 billion investment in Anthropic. These moves have raised concerns about potential monopolistic control and stifling competition, prompting the CMA to solicit comments and potentially launch formal investigations.

Joel Bamford, CMA’s executive director of mergers, emphasised an impartial assessment of these deals and their impact on UK competition. CMA’s Chief Executive Sarah Cardell expressed ‘real concerns’ about the AI market, especially with six tech giants forming an ‘interconnected web’ of AI partnerships. Microsoft and Amazon now face a ‘phase one’ investigation to determine if their deals violate UK merger regulations and pose competition issues, with the possibility of further action in a ‘phase two’ investigation.

Why does it matter?

Microsoft’s €15 million investment in Mistral, coupled with Suleyman’s recruitment and Inflection AI’s integration, has drawn attention. Likewise, Amazon’s collaboration with Anthropic to leverage its cloud services and custom chips for AI models is under scrutiny. Legal experts like Alex Haffner view the CMA’s move as indicative of its keen interest in the evolving AI market. Both Microsoft and Amazon have pledged cooperation, with Microsoft defending such deals as promoting competition and Amazon highlighting differences from other partnerships.