UK Competition Watchdog Scrutinizes Microsoft, Amazon AI Partnerships

The Competition and Markets Authority (CMA) in Britain announced on Wednesday that it is seeking feedback on the artificial intelligence (AI) partnerships between tech giants Microsoft and Amazon and their respective AI startups, Mistral AI and Anthropic. 

Reuters reported on Tuesday, that the regulatory body is also soliciting views from third parties regarding Microsoft's hiring of former employees from Inflection AI, a startup founded by DeepMind co-founder Mustafa Suleyman. 

This move by Microsoft last month raised questions about potential competition concerns. 

The CMA clarified that it has not yet drawn any conclusions on whether these partnerships violate UK merger rules or pose competition issues. However, it emphasized the need for transparency and public input in assessing the impact of such collaborations. 

In response to the CMA's inquiry, Microsoft expressed confidence in its business practices, stating that talent hiring and investments in AI startups are standard industry practices that promote healthy competition and innovation. The company pledged to cooperate fully with the CMA's inquiries. 

Similarly, Amazon defended its partnership with Anthropic, emphasizing that it differs from typical collaborations between tech giants and AI startups. 

The partnership includes a limited investment and does not grant Amazon a board director or observer role, maintaining Anthropic's autonomy in running its models across multiple cloud providers. 

The CMA's decision to investigate these AI partnerships follows its recent report on AI Foundation Models, which uncovered a complex network of over 90 partnerships and strategic investments involving major tech companies. 

This move underscores the regulator's commitment to ensuring fair competition and safeguarding consumer interests in the rapidly evolving AI landscape. 

This scrutiny by the CMA mirrors similar efforts by regulatory bodies worldwide to monitor the growing influence of tech giants in the AI sector. 

In January, the U.S. Federal Trade Commission ordered Microsoft, Alphabet, Amazon, and others to provide information on their recent investments and partnerships in generative AI companies and cloud service providers. 

Interested parties are invited to submit their views to the CMA by May 9 as part of the information-gathering process, which precedes any formal investigation.