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The UK government has launched Preliminary investigation Will Amazon’s partnership with Anthropic significantly reduce competition? A few days ago, Similar probes Alphabet announced a partnership with the AI startup.
In March of this year, Amazon completed $4 billion (£3.16 billion) investment Anthropic is the company behind Claude LLM’s family, one of the only competitors to OpenAI’s ChatGPT and Google’s Gemini. The company was founded by former OpenAI employees, including brother and sister Daniela and Dario Amodei, who are both executives.
In return for its investment, Anthropic committed to using Amazon Web Services as its primary cloud provider for “mission-critical workloads, including security research and future foundational model development.” It also agreed to use Amazon’s Trainium and Inferentia chips to build, train, and deploy its models, and to host them on Amazon Bedrock, an AI application development platform.
However, the Competition and Markets Authority believes the tie-up could lead to a “substantial lessening of competition” in the UK tech market. It now has until October 4 to make a so-called “Phase 1” decision on whether the merger warrants a full “Phase 2” investigation or whether competition-related concerns have been resolved.
If the CMA finds cause for concern that could lead to a stage 2 referral, Amazon will have the opportunity to “Make a commitment to try to solve (a problem)”
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“We are an independent company,” a spokesperson for Anthropic told TechRepublic in an email. “Our strategic partnerships and investor relationships do not diminish our corporate governance independence or our freedom to work with other companies.”
“Amazon does not have a seat on Anthropic’s board, nor any board observer rights. We intend to work with the CMA to give them a full understanding of Amazon’s investment and our commercial collaboration.”
“We are disappointed that the UK Competition and Markets Authority (CMA) has not concluded its investigation,” an Amazon spokesperson told TechRepublic in an email. “Amazon’s work with Anthropic did not raise any competition concerns or meet the CMA’s own threshold for review.”
“In the early days of generative AI, customers were essentially left with only one successful option. Anthropic has worked hard to become an emerging, viable alternative. However, models are expensive to build, and companies like Anthropic need access to significant capital to train these models. By investing in Anthropic, Amazon and others are helping Anthropic expand the choice and competitiveness of this important technology.
“Amazon has no board seat or decision-making power at Anthropic, and Anthropic is free to work with any other vendor (and does have multiple partners). Amazon will also continue to make these Anthropic models available to customers through Amazon Bedrock, a service that makes it easier for developers and companies to leverage Large Language Models (LLMs) and build generative AI applications.”
Other CMA investigations
Last month, the CMA launched an investigation into Google parent company Alphabet’s partnership with Anthropic. Google agreed Investment of up to US$2 billion October in AI safety and research startups Get 10% of the shares In return, the company will inject $300 million starting in late 2022.
Microsoft is also in trouble. Another open Phase 1 survey Has it hired Inflection AI co-founder Mustafa Suleyman and “Some“The behavior of my colleagues should be considered anti-competitive behavior. The agency is also investigating The connection between Microsoft and OpenAI Opens up the possibility of mergers, which could affect competition.
look: CMA to scrutinize Microsoft and other cloud service providers in UK
Canadian Medical Association End of investigation In May, Microsoft struck an Azure partnership with French AI startup Mistral, which involved the tech giant taking a minority stake in exchange for hosting all of Mistral’s LLM programs on Azure. The two parties determined that the deal would not substantially lessen competition or harm consumer interests.
Why is the CMA investigating Big Tech?
Large technology companies are rapidly investing in young AI startups to gain early control and capitalize on the AI boom. Notably, this can be seen through the following partnerships: Microsoft and OpenAI, NVIDIA and Inflection AIand Google and Anthropic.
However, such collaborations can lead to market dominance, making it more difficult for other independent companies to obtain funding, attract talent or compete with the advanced technology and influence of large companies.
As a result, full-blown mergers and acquisitions typically trigger extensive regulatory scrutiny and potential antitrust litigation that could delay or block a deal. To avoid this, tech giants instead make strategic investments in the most promising startups and hire their top talent, giving them unfettered access to influence and innovative technology.
In an April report How CMA studies basic models of artificial intelligenceThe CMA said: “Without fair, open and effective competition, and strong consumer protection, based on these principles, we see a real risk that the full potential of innovation and disruption enabled by organisations or individuals using AI will not be realised, nor its benefits shared broadly across society.
“That’s why we’ve set out the fundamental principles that we believe are essential to maintaining these conditions. Competition agencies must work with market participants and other stakeholders to shape these positive outcomes.”
look: Five-year delay in UK rollout of AI could cost economy more than £150bn, Microsoft report finds
The CMA is seeking to identify “relevant merger circumstances” where big tech companies can “protect themselves from UK competition”. It said a “range of different types of transactions and arrangements” could represent relevant mergers for the purposes of the Competition Act 2019. Enterprises Act 2002.
The Digital Markets, Competition and Consumer Bill, passed in May, also “heralds new powers for the CMA.” According to the April report, the CMA can “enforce consumer protection laws against companies that infringe on rights” and impose fines of up to 10% of a company’s global turnover on non-compliance.
“We are prepared to use these new powers to raise standards in our markets and, where necessary, take enforcement action against companies that fail to follow the rules,” the statement said.
In addition, in July, CMA Issue a joint statement Reached an agreement with the European Commission, the U.S. Department of Justice, and the U.S. Federal Trade Commission to study whether sufficient competition is allowed in the artificial intelligence industry.
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