The U.K.’s Competition and Markets Authority (CMA) has okayed Alphabet’s partnership and investment in AI rival Anthropic, concluding that it doesn’t qualify for investigation under current merger regulations.
The announcement comes a month after the CMA revealed it was launching a formal “stage 1” probe into Google’s parent’s various investments in Anthropic, a three-year-old San Francisco-based startup that develops large language models (LLMs) and an associated chatbot called Claude, which is something akin to OpenAI’s ChatGPT or Google’s own Bard.
Alphabet had reportedly invested $300 million in Anthropic early last year, followed by another $2 billion.
Anthropic had courted other big names from the tech world, including Amazon which had invested $4 billion. The CMA had been looking into that partnership, too, however in September it came to the same conclusion as it has now with Alphabet, announcing that it couldn’t investigate the deal under current merger rules due to the size and scope of the deal.
These various investigations have formed part of a a multi-pronged probe into what has been dubbed the “quasi-merger,” which has seen Big Tech firms take a fresh approach to gaining control of younger innovators through hiring startup founders and talent, and — as is the case here — making strategic investments.
However, the CMA has now said that it “does not believe that Google has acquired material influence over Anthropic as a result of the partnership.” More specifically, the CMA said that it considered whether the duo’s commercial relationship meant that Google could exert influence at the board level, and also whether a technical reliance on Google’s infrastructure (e.g. cloud computing resources) could also play a role in stymying competition.
“The available evidence did not indicate that Google has the ability to exercise material influence over Anthropic through the partnership,” the CMA noted.
Additionally, Anthropic didn’t meet the so-called “turnover test” to qualify for investigation, as Anthropic’s U.K. turnover doesn’t exceed £70 million.
