The U.K.’s Competition and Markets Authority (CMA) is examining whether the collaborations and hiring practices involving Microsoft, Amazon, and several AI startups may fall under its merger regulations and potentially hinder competition in the U.K. market. This move follows increased scrutiny of Big Tech’s approach to mergers and acquisitions in the AI sector, where some critics argue that quasi-mergers have emerged as a means to circumvent regulatory oversight.
The CMA’s investigation will focus on whether these partnerships, investments, and hiring practices could have equivalent effects to mergers. The authority will assess the potential impact on competition in the U.K.’s rapidly growing AI industry.
Foundation models, which form the underlying infrastructure for various AI systems, have also been a subject of regulatory attention in Europe and other regions. Concerns have been raised that partnerships involving major players in this domain could enable dominant technology firms to maintain their market positions.
Microsoft’s partnership with ChatGPT-maker OpenAI, along with its investment in Inflection AI and establishment of a London AI hub, has drawn the CMA’s attention. Amazon’s recent $4 billion investment in Anthropic, another U.S.-based AI company specializing in large language models, has also been noted.
Joel Bamford, the CMA’s executive director of mergers, emphasized the importance of assessing whether these partnerships are comparable to mergers and could impact competition in the U.K.’s AI sector. He highlighted the potential of foundation models to transform industries and the need for fair and effective competition to ensure the benefits reach businesses and individuals in the U.K.
