CMA invites comments on Microsoft and Amazon AI partnerships
Regulator has warned against Big Tech's growing AI dominance
The UK's Competition and Markets Authority (CMA) is seeking comment on three major partnerships involving tech firms and AI start-ups.
This move may herald an investigation into whether such deals stifle competition in the growing AI sector.
The invitations to comment (ITCs) focus on partnerships between:
- Microsoft and Mistral AI: This partnership saw Microsoft investing in a French AI start-up specialising in open-source models, and has already attracted criticism.
- Amazon and Anthropic: This multi-billion dollar investment by Amazon includes Anthropic using Amazon's cloud services and potentially offering its models on Amazon's Bedrock platform.
- Microsoft and Inflection AI: This includes Microsoft hiring former Inflection AI CEO Mustafa Suleyman and key employees, along with potential integration of Inflection's AI models into Microsoft Azure.
The ITCs are the first step in the CMA's information-gathering process, preceding a formal Phase 1 review. It's important to note that this doesn't guarantee an investigation or necessarily mean the CMA has jurisdiction.
The CMA is inviting public feedback by 9th May, 2024.
The move follows a recent CMA report highlighting the potential pitfalls of close collaboration between big tech and AI firms.
The report identified an "interconnected web" of over 90 partnerships and investments between a select few tech giants and AI start-ups. It warned that such a web could be used to consolidate power and resources within the AI industry, ultimately harming healthy competition.
Joel Bamford, head of mergers at the CMA, underscored the importance of open competition in AI foundation models.
He said these models have the potential to impact everything from healthcare to finance, so ensuring fair competition is critical for reaping the full benefits.
"The CMA recently committed to step up the use of its merger control powers as part of its recent Foundation Models update. While we remain open minded, and haven't drawn any conclusions, our aim is to better understand the complex partnerships and arrangements at play," Bamford added.
Alex Haffner, a competition partner at the UK law firm Fladgate, says the CMA's announcement is significant for several reasons.
"Firstly, coming against several recent announcements by CMA (in tandem with its counterparts in other jurisdictions, particularly the EU and US) that further regulatory oversight of the fast moving AI sector is required to ensure that competition is preserved.
"Second is the fact that the CMA appears to be looking at several different corporate events involving Microsoft together – whereas ordinarily it would be expected to consider each in turn.
"Thirdly and finally, the CMA is already formally investigating Microsoft's role in the Open AI project. This latest announcement calls into question where it has got to in that process and how it will in turn be impacted by today's events."
Not everyone is happy with the CMA's review - including, predictably, the firms named.
Amazon says the CMA's call for comment is "unprecedented," and claims the deal with Anthropic is "fundamentally different" from other big tech partnerships.
The ecommerce giant says that unlike Microsoft's arrangement with OpenAI, Amazon doesn't have a board seat or observer role in Anthropic, and the start-up remains free to use other cloud platforms.
Microsoft has pledged full cooperation with the CMA's inquiries, maintaining that hiring talent and investing in AI start-ups are standard business practices that promote competition.
"We remain confident that 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," the company said.