Today: Feb 12, 2025

Britain’s competition watchdog launches investigation into Google’s partnership with AI Startup Anthropic

4 months ago

Britain’s Competition and Markets Authority (CMA) has launched a formal investigation into Google’s partnership with Anthropic, an AI startup. The investigation was announced on Thursday and focuses on whether the partnership could potentially stifle competition within the United Kingdom’s AI industry.

This isn’t just another tech deal; it involves one of the most prominent tech companies, Google, aligning with one of the most innovative AI startups, Anthropic. What does this mean for the AI landscape?

Let’s break it down.

Why is the CMA investigating?

The CMA has expressed concern that Google’s investment and collaboration with Anthropic might give the tech giant too much influence in the rapidly growing AI market.

The regulator has “sufficient information” to warrant the probe, which is now entering its formal phase.

The inquiry will determine whether Google’s partnership with Anthropic could lead to reduced competition by limiting other companies’ access to AI advancements.

The CMA has until December 19 to make a preliminary decision on whether to green-light the deal or escalate the investigation further.

This timeline is crucial because it sets the stage for potentially broader regulatory actions not only in the UK but globally.

Google, in response to the probe, emphasized its commitment to fostering an open and innovative AI ecosystem.

A spokesperson for the company stated, “Anthropic is free to use multiple cloud providers and does, and we don’t demand exclusive tech rights.”

This is key, as the regulator will be looking at whether Google has tried to monopolize Anthropic’s technology or its use of cloud services.

Who is Anthropic?

Founded in 2021 by siblings Dario and Daniela Amodei—both former executives at OpenAI—Anthropic has quickly gained prominence in the AI world.

Their focus has been on creating AI models that are not only innovative but also safe and reliable.

The startup’s chatbot, Claude, competes with OpenAI’s GPT models and is widely used for various AI-driven tasks.

Google, recognizing Anthropic’s potential, made a multibillion-dollar investment in the startup last year, signaling its strong interest in the AI space.

Anthropic has since benefited from Google’s resources, including its cloud services, but has maintained that it operates independently.

In a statement responding to the CMA investigation, the company reiterated that “none of our strategic partnerships or investor relationships diminish the independence of our corporate governance or our freedom to partner with others.”

Why does this matter?

The rise of AI is reshaping industries globally, from healthcare to finance, and the competition to lead this transformation is fierce.

As more investment flows into AI, regulators like the CMA are increasingly cautious about how big tech companies, such as Google, Microsoft, and Amazon, are positioning themselves.

Google’s investment in Anthropic is not the only AI deal under scrutiny. The CMA recently approved Anthropic’s $4 billion deal with Amazon, another tech giant keen to expand its AI capabilities.

Similar investigations have cleared Microsoft’s partnerships with AI startups Inflection and Mistral.

With so much money being funneled into AI startups, regulators are concerned that unchecked collaborations could result in monopolistic behavior, reducing innovation and competition in the long run.

Last month, the CMA joined forces with regulatory bodies in the United States and the European Union to coordinate efforts in maintaining fair competition in the AI industry.

This global alignment shows just how seriously governments are taking the potential impact of AI on future markets.

A booming AI market

The AI industry is booming, largely thanks to OpenAI’s release of ChatGPT nearly two years ago, which sparked widespread interest in the capabilities of AI-driven technologies.

Since then, major tech companies have been racing to invest in or acquire smaller AI firms to get ahead of the curve. Google’s parent company, Alphabet, is a key player in this race, and its substantial investment in Anthropic is seen as part of a broader strategy to ensure it stays competitive with rivals like Microsoft and Amazon.

Data suggests that global AI investments reached an all-time high in 2023, with projections showing continued growth in 2024 and beyond.

With figures like these, it’s no surprise that regulators want to ensure the market remains competitive, allowing for innovation without unfair dominance from a few major players.

What comes next?

The CMA’s investigation will be closely watched by both industry insiders and competitors.

If the regulator decides to escalate the investigation past December, it could lead to more stringent oversight or even force changes to how Google and Anthropic operate together.

But even beyond this specific case, the CMA’s actions signal a broader trend: regulators are increasingly keeping a close eye on how big tech companies engage with AI startups.

As the industry grows, the need to balance innovation with fair competition will remain a key focus.

For now, Google and Anthropic remain cooperative with the CMA, each emphasizing that their partnership is beneficial, competitive, and fair.

But the outcome of this investigation could set a precedent for how AI deals are structured moving forward.

The AI revolution is here, and regulators are determined to make sure that it benefits everyone, not just the tech giants at the top.

Whether this investigation results in tighter controls or clears the path for future deals, one thing is clear: the future of AI, and who controls it, is a high-stakes game that’s only just beginning.

Fabrice Iranzi

Journalist and Project Leader at LionHerald, strong passion in tech and new ideas, serving Digital Company Builders in UK and beyond
E-mail: iranzi@lionherald.com

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