The UK's Competition and Markets Authority (CMA) has initiated an investigation into recent collaborations among leading participants in the AI sector, as announced on April 24th.

The CMA has requested feedback on several partnerships: Microsoft's collaboration with Mistral AI, Amazon's partnership with Anthropic, and Microsoft's hiring and licensing agreement with Inflection AI.

Their objective is to ascertain whether these activities comply with UK merger regulations and their potential effects on competition. Joel Bamford, the Executive Director of Mergers, assured that the CMA will conduct its assessment with objectivity and impartiality.

A previous report identified a network of over 90 partnerships and strategic investments, some of which may not adhere to merger rules.

The current invitations to comment (ITC) issued by the CMA do not initiate a formal review, and the agency has not drawn any conclusions or necessarily possesses the jurisdiction for further action.

The deadline for submitting comments is May 9th.

Responses from Companies:

Several companies subject to the investigation have challenged the regulator's actions due to the nature of their partnerships.

Amazon stated to CNBC that the review is unprecedented for a partnership of its kind, highlighting that its investment in Anthropic is limited and does not grant it a board seat or observer role. Additionally, Anthropic operates independently from Amazon and utilizes multiple cloud providers.

Microsoft expressed confidence to CNBC that hiring and fractional investments differ from mergers and committed to providing information to the CMA.

Original Partnerships:

Amazon formed a $4 billion partnership with Anthropic in March, while Microsoft confirmed a $16 million investment with Mistral in February.

The CMA outlined the computational resource sharing and business aspects of each partnership, focusing on the financial aspects of Amazon's partnership.

Microsoft also entered into a licensing agreement with Inflection in March, concurrently hiring Inflection co-founder Mustafa Suleyman and other employees, estimated at $650 million.

Microsoft's extensive partnership with OpenAI underwent a comment period in December 2023, which closed in January without leading to a probe.