The UK’s antitrust regulator will formally investigate Alphabet’s $2.3 billion Anthropic investment

The UK’s competition regulator is probing Alphabet’s investment in AI startup Anthropic. After opening public comments this summer, the Competition and Market Authority (CMA) said on Thursday it has “sufficient information” to begin an initial investigation into whether Alphabet’s reported $2.3 billion investment in the Claude AI chatbot maker harms competition in UK markets.

The CMA breaks its merger probes into two stages: a preliminary scan to determine whether there’s enough evidence to dig deeper and an optional second phase where the government gathers as much evidence as possible. After the second stage, it ultimately decides on a regulatory outcome.

The probe will formally kick off on Friday. By December 19, the CMA will choose whether to move to a phase 2 investigation.

Google told Engadget that Anthropic isn’t locked into its cloud services. “Google is committed to building the most open and innovative AI ecosystem in the world,” a company spokesperson wrote in an email. “Anthropic is free to use multiple cloud providers and does, and we don’t demand exclusive tech rights.” Engadget also reached out to the CMA for comment, and we’ll update this story if we hear back.

TechCrunch notes that Alphabet reportedly invested $300 million in Anthropic in early 2023. Later that year, it was said to back the AI startup with an additional $2 billion. Situations like this can be classified as a “quasi-merger,” where deep-pocketed tech companies essentially take control of emerging startups through strategic investments and hiring founders and technical workers.

Amazon has invested even more in Anthropic: a whopping $4 billion. After an initial public comment period, the CMA declined to investigate that investment last month. The CMA said Amazon avoided Alphabet’s fate at least in part because of its current rules: Anthropic’s UK turnover didn’t exceed £70 million, and the two parties didn’t combine to account for 25 percent or more of the region’s supply (in this case, AI LLMs and chatbots).

Although the CMA hasn’t specified, something in Alphabet’s $2.3 billion Anthropic investment constituted a deeper dive. Of course, Google’s Gemini competes with Claude, and both companies make large language models they provide to small businesses and enterprise customers.

Update, October 25, 2024, 11:10AM ET: This story has been updated to add a quote from a Google representative.