Britain’s antitrust watchdog launched a probe into Google parent Alphabet on Thursday, opening a new tab partnership with artificial intelligence startup Anthropic. The Competition and Markets Authority (CMA) said it will examine whether the pact could reduce competition in the UK market for chatbot software. It’s the latest in a series of inquiries by the CMA looking at AI partnerships between big tech firms and smaller startups.
Almost two years after Microsoft-backed, opens new tab, OpenAI, triggered an AI boom with the release of ChatGPT, regulators worldwide have been increasingly concerned by multiple deals struck between smaller industry startups and large technology giants. These include agreements between big tech companies like Microsoft and startups such as Inflection AI and Mistral AI and Alphabet’s ties to smaller startups such as Cohere and Anthropic.
The CMA, which is investigating both the Microsoft and Alphabet partnerships, has invited comments from interested parties before beginning a formal “phase 1” investigation. It could refer to the pacts for a more in-depth investigation or clear them of competition concerns. The CMA expects to decide whether to move the Anthropic case to a Phase 2 investigation, which is considerably more in-depth, by Oct. 4.
Anthropic is an AI startup that created the Claude chatbot, competing with Microsoft’s chatbots and Google’s Gemini bot. Last year, it secured a $500 million investment from Alphabet and promised another $1.5 billion. It also uses Amazon’s AWS cloud service and partners with hardware maker Cohere. Founded by former OpenAI executives and siblings Dario and Daniela Amodei, the company has more than doubled in value since its launch in 2015.
The founders of both companies say they’re working together to create an industry standard for designing AI. They have both signed an industry code of conduct to promote fair competition and vowed not to take unfair advantage of consumers or developers. The companies also have agreed to set up a public forum to discuss competition issues.
The pact with Anthropic is one of several such arrangements in which the companies are working together to develop AI technology, but they also have competing products and services. For example, a competitor to the Claude chatbot is Microsoft’s Bing, and both companies are competing for search advertising revenue.
As these overlapping deals multiply, critics argue that they’re threatening to diminish innovation and hamper the growth of AI. In the past, regulators have taken a cautious approach to examining the impact of these partnerships on the tech sector, but they’re starting to take a closer look at the issue.
For the most part, big tech firms have reacted quickly to criticism and changed their partnerships to avoid regulatory action. But some analysts say more needs to be done to tackle the power of companies such as Microsoft, Apple, Amazon, and Google. For now, though, these massive tech firms continue to see record profits and sales and are helping drive the stock markets to all-time highs.