The UK Competition Watchdog Focuses Microsoft and Amazon Partnerships in the AI Sector

In this post:

  • The Competition and Market Authority (CMA) of the UK is looking into partnerships formed by Microsoft and Amazon for AI development.
  • CMA recently outlined principles for AI Foundation Models in a report and identified a number of partnerships involving the same companies.
  • Microsoft has offered its cooperation with the required information, while Amazon has said it has never seen CMA investigate partnerships like the one it is involved in.

The competition overseer of Britain is looking for comments on the partnership related to artificial intelligence between Microsoft and Mistral AI and also between Amazon and Anthropic, it said this week.

Microsoft and Amazon are under the CMA’s scrutiny

An illustration of presence of GAMMA firms across FM value chain. Source: Government of UK.

A month ago, Microsoft hired Mustafa Suleyman, who was the co-founder of DeepMind, as the head of the consumer AI unit that it had newly formed, and it also hired some more people who were working at Inflection AI, which is also Suleyman’s startup, which he started with Reid Hoffman.

The Competition and Markets Authority (CMA) also welcomed third parties, as it wanted to hear their views on the subject of former employees of Inflection AI hired by Microsoft and related arrangements that the company made.

The regulator also clarified that it has not come to any conclusions about Microsoft’s related exercises if they do fall under UK merger laws or if they violate competition rules yet.

Microsoft also gave its view on the subject and tried to clear the air by saying,

“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.”

A Microsoft spokesperson also said,

“We will provide the UK Competition and Markets Authority with the information it needs to complete its inquiries expeditiously.”

Source: Reuters.

An interconnected web of 90 partnerships

Speaking of its partnership with Anthropic, Amazon said that they have not seen the Competition and Market Authority reviewing collaborations of the type that they have formed. A representative of the company said,

“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.”

Source: Reuters.

Microsoft’s partnership with OpenAI is already under scrutiny, as CMA is looking into it and has asked for views from stakeholders back in December. As CMA said that it is considering the information it received at the start of the year on this partnership and that it is currently waiting for more information that it had requested from the firms. 

A web of partnerships involving tech giants. Source: Government of UK.

CMA also cleared that its decision to assess the Amazon-Anthropic and Microsoft-Mistral partnerships came after it spotted 90 partnerships and strategic investments in the AI sector forming a sort of web that is interconnected and involves the same companies working in the generative AI and cloud services industries when it was working on a report that it released recently on AI Foundation Models.

The Federal Trade Commission of the US has also ordered to provide information on recent partnerships and investments in January that involve cloud service providers and generative AI companies, including Alphabet, OpenAI, Amazon, Anthropic, and Microsoft, to assess the practices.

The CMA’s first part of the information gathering process includes getting these views mentioned above, as it has invited them before May 9, and after that, it may start a formal investigation.

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