Competition watchdog investigating Alphabet’s links to AI firm Anthropic

The UK’s competition regulator has confirmed it is investigating Google’s parent company and its partnership with fellow AI firm Anthropic over concerns it could impact competition in the AI market.

The Competition and Markets Authority (CMA) has published an invitation to comment from “any interested party” on the partnership.

Alphabet is reported to have invested more than two billion dollars in Anthropic over several funding rounds for the US start-up – an approach that has become common in the tech sector, with many of the biggest names investing heavily in AI start-ups.

But this approach has caught the attention of regulators in recent months, with the CMA publishing a report earlier this year which warned of potential risks to fair and open competition in the AI space.

It specifically highlighted what it called an “interconnected web” of more than 90 partnerships and strategic investments from the biggest names in tech – including Alphabet, Amazon , Apple and Microsoft – and emerging AI firms, a set-up it warned could be used to consolidate power and resources within the sector among a few companies.

Amazon, as well as Alphabet, has invested heavily in Anthropic, while Microsoft is the largest investor in ChatGPT maker OpenAI.

OpenAI has also formed a partnership with Apple to embed ChatGPT into future generations of the iPhone as part of Apple’s plans to bring more generative AI tools to its products.

Regulators have argued that these large investments and partnerships could see the biggest tech firms able to gain some control over the direction of emerging AI firms, without attracting the regulatory scrutiny that a full acquisition might.

In its announcement, the CMA said: “The Competition and Markets Authority (CMA) is considering whether it is or may be the case that this partnership 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 relevant merger situation has resulted, or may be expected to result, in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”

Alphabet has been contacted for comment.

Earlier this month, the CMA also confirmed that it was investigating Microsoft’s hiring of staff from Inflection AI, after it named the firm’s former boss as the leader of its new Microsoft AI unit, with several other members of staff following him to Microsoft.