May 30, 2024


Big Tech’s investments into smaller AI firms to boost their spot in the AI race aren’t without some scrutiny.

The UK’s Competition and Markets Authority (CMA) said Wednesday it is inviting third parties to comment on whether the partnership between Microsoft and Mistral AI, as well as Amazon’s partnership with Anthropic, fall under the UK’s merger regulations and can threaten competition. The CMA is also asking for comment on Microsoft’s hiring of former Inflection AI employees, including its co-founder, amid its $650 million deal with the startup to license its AI software.

The invitations for comment are just the first part of the antitrust watchdog’s information gathering process before the first formal reviews, it said. Not all partnerships fall under merger regulations, and therefore do not require an investigation.

“Foundation Models have the potential to fundamentally impact the way we all live and work, including products and services across so many UK sectors —healthcare, energy, transport, finance and more,” Joel Bamford, executive director of mergers at the CMA, said in a statement. “So open, fair, and effective competition in Foundation Model markets is critical to making sure the full benefits of this transformation are realised by people and businesses in the UK, as well as our wider economy where technology has a huge role to play in growth and productivity.”

A Microsoft spokesperson said in a statement shared with Quartz that it will provide the CMA with the necessary information to complete its review.

“We remain confident that common business practices such as the hiring of talent or making a fractional investment in an AI start-up promote competition and are not the same as a merger,” the spokesperson said.

Microsoft announced a multi-year partnership with Mistral in February focused on commercializing the startup’s flagship models and scaling up its AI development and deployment. That partnership, as well as Microsoft’s partnership with OpenAI, are under European Union scrutiny over potential impacts on the bloc’s market competition. The CMA was also gathering information on Microsoft’s deal with OpenAI in December.

A spokesperson for Amazon said in a statement shared with Quartz that the CMA’s inquiry into its $4 billion partnership with Anthropic is “unprecedented.”

“Unlike partnerships between other AI startups and large technology companies, our collaboration with Anthropic includes a limited investment, doesn’t give Amazon a board director or observer role, and continues to have Anthropic running its models on multiple cloud providers,” the spokesperson said, adding that its investment in Anthropic is actually “helping make the generative AI segment more competitive than it’s been the last couple years.”

Mistral, Anthropic, and Inflection did not immediately respond to requests for comment.

The CMA said its announcement follows a recent report that found a web of more than 90 partnerships and strategic investments between big tech firms and AI startups that could impact competition.



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