British Regulators Put Microsoft and Amazon AI Deals Under the Microscope
The UK’s Competition and Markets Authority (CMA) is seeking input on the implications of partnerships between tech giants Microsoft and Amazon and smaller generative artificial intelligence (AI) model developers. This inquiry could reshape the AI industry’s landscape, and experts warn that a strict antitrust ruling may not only alter how major corporations interact with emerging AI firms but could also dampen enthusiasm for new partnerships, possibly stalling the pace of innovation.
Regulators are taking a closer look at AI deals
“A direct ruling that prohibits exclusive partnerships or creates substantial barriers to building direct partnerships between generative AI companies and the major tech companies will likely make capital more difficult to obtain and would therefore slow their growth,” Ryan M. Yonk, a senior research faculty member at think tank The American Institute for Economic Research, told PYMNTS.
The future of AI innovation hangs in the balance
The CMA is asking for input from stakeholders by May 9 to determine whether the business dealings in question should be classified as mergers. This request for comments is an initial step in the information-gathering phase, which precedes the start of a formal Phase 1 investigation by UK regulators.
“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 news release.
Microsoft has invested 15 million euros ($16 million) in Mistral AI, an emerging French AI company founded by ex-employees of Meta and Google’s DeepMind. As part of the agreement, Mistral, recently valued at 2 billion euros ($2.14 billion), will make its advanced large language models (LLMs) available on Microsoft’s Azure cloud platform.
Mistral AI is one of the emerging companies at the center of the inquiry
Amazon has invested $4 billion in the US AI company Anthropic, known for its LLM chatbot Claude. Amazon has stated it will keep a minority stake in Anthropic and not take a board position.
Anthropic is another company under scrutiny
In recent years, concerns about the market dominance of large technology companies, mainly those heavily invested in AI, have led to increased scrutiny and anti-trust rulings.
The AI market is under scrutiny
The outcome of this inquiry will have far-reaching implications for the AI industry, and the world will be watching as the CMA deliberates on the future of AI innovation.
