Amazon’s AI partnership with Anthropic is under inquiry, UK regulator says

Days after the U.K. antitrust agency said it was looking into Google’s (NASDAQ:GOOG) (NASDAQ:GOOGL) partnership with artificial intelligence startup Anthropic, it’s doing the same with Amazon (NASDAQ:AMZN).

The Competition and Markets Authority said it is considering whether the partnership between the Andy Jassy-led Amazon and Anthropic “has resulted in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”

The CMA said it notified both Amazon and Anthropic that it has “sufficient information” and started Phase 1 of an investigation. The deadline for the CMA to determine it will move onto a Phase 2 investigation is October 4.

An Amazon spokesperson said it was “disappointed” that the CMA has not yet ended its probe.

“Amazon’s collaboration with Anthropic does not raise any competition concerns or meet the CMA’s own threshold for review,” an Amazon spokesperson said in an email to Seeking Alpha. “The early days of generative AI have largely seen one successful option available for customers. Anthropic has worked hard to become an emerging viable alternative. But, building models is expensive, and companies like Anthropic need access to a substantial amount of capital to train these models. By investing in Anthropic, Amazon, along with other companies, is helping Anthropic expand choice and competition in this important technology.”

Amazon shares were fractionally higher in premarket trading on Thursday.

Anthropic did not immediately respond to a request for comment from Seeking Alpha.

In May, the CMA said that a similar deal between Microsoft (MSFT) and French AI startup Mistral AI did not qualify for investigation.

Amazon announced in March that it would invest an additional $2.75B into Anthropic, maker of the Claude AI chatbot, bringing its total to $4B.

The investment gave Amazon a minority stake in Anthropic but without a board seat. Anthropic is the largest outside investment for Amazon following a $1.3B investment in EV-maker Rivian (RIVN).

Anthropic was last valued at $18.4B, according to CNBC.

Several other tech companies have also invested in Anthropic, including Google and Salesforce (CRM).

Anthropic has a deal with Amazon to use Amazon Web Services for mission-critical workloads, including safety research and future foundation model development.

Anthropic also has a deal with Google to use its newest artificial intelligence-focused processors, known as TPU v5e, as well as its cloud services.