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CMA gives Googles $2B Anthropic investment the green light
It took the UKs Competition and Markets Authority (CMA) less than a month to decide that there is no need to proceed further with a merger investigation after Googles purchase of a $2 billion stake in Anthropic.In a statement released on Oct. 24, the CMA indicated that it had obtained sufficient information to launch a preliminary investigation into the investment by Google, which was first announced last year and involved an initial sum of $500 million, with the remainder to be invested at a later date.The regulator was then scheduled to announce on Dec. 19 whether or not a more detailed phase 2 probe would take place, a move that ended up being fast forwarded.Scott Bickley, advisory fellow at Info-Tech Research Group, said when the initial investigation was announced that the probe sounded like a precautionary investigation across the board to me, primarily due to the fact that the CMA just recently approved Amazons Anthropic investment and partnership.Last March, Amazon announced it was investing $2.75 billion in Anthropic, bringing its total investment in the AI startup to $4 billion.As part of this partnership, Anthropic said it would use Amazon Web Services (AWS) as its main cloud provider for key operations, including AI safety research and the development of foundation models. Anthropic will also use AWS Trainium and Inferentia chips for building, training, and deploying future models.The CMA ruling on that investment was released on Sept. 27, and stated that the regulator does not believe that a relevant merger situation has been created.Phil Brunkard, executive counselor at Info-Tech Research Group, UK, said last month that both Google and Amazon are trying to compete with OpenAI, but its interesting that the CMA is focusing on Google when Amazon was just cleared, which raises some questions about consistency.While investigations do create some uncertainty, he said, Amazons clearance hints that Google could have a similar outcome. It seems the CMA is just being thorough, but these investments will likely continue.Brunkard said Tuesday he was not surprised by the ruling issued by the CMA, a non-ministerial department in the UK government that oversees business activities and flags potentially unfair competition.As I had mentioned previously, the CMA appeared to have been conducting a thorough review, and the latest report confirms they were satisfied after assessing their criteria, he said, adding, its essential that the CMA continues this consistent approach to ensure a fair and competitive marketplace.This kind of oversight, said Brunkard, is especially important in the exponentially evolving AI sector, where investments from tech giants like Google and Amazon have the potential to shape the market significantly.The CMA first launched an initial review into the market for AI systems in May 2023, and in a statement announced it would focus in on three key areas: how the competitive markets for foundation models and their use could evolve; the opportunities and risks these scenarios could bring for competition and consumer protection; and what guiding principles should be introduced to support competition and protect consumers as AI models develop.The organization said that the review is in line with the UK governments aim to support open, competitive markets.
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