Amazon’s $4 billion investment in Anthropic gets green light from UK regulator

Summary

The UK’s Competition and Markets Authority (CMA) has approved Amazon’s multi-billion pound investment in AI startup Anthropic. The regulator found no competition concerns warranting further investigation.

The CMA said Anthropic’s UK revenue was below the threshold for a merger probe under British law. It also determined Anthropic’s market share in the UK was not significant enough to justify additional scrutiny.

Amazon’s deal with Anthropic, worth up to $4 billion as of March 2024, gives the tech giant priority access to Anthropic’s AI models and chatbots like Claude. In return, Anthropic will use AWS as its main cloud provider and develop future models using Amazon’s custom AI chips.

Amazon’s partnership with Anthropic, which totals up to $4 billion as of March 2024, grants the tech giant priority access to Anthropic’s foundational models and chatbots, including Claude. In exchange, Anthropic has committed to utilizing AWS as its primary cloud provider and developing future models using Amazon’s proprietary Trainium and Inferentia chips.

The collaboration aims to facilitate the responsible deployment and scaling of customized generative AI solutions, especially in highly regulated sectors.

Amazon needs Anthropic for its Alexa redesign

Interestingly, Amazon’s internal AI division, spearheaded by SVP Rohit Prasad, views Anthropic as a competitor. The group is working on a flagship model called “Olympus”, originally aiming to outperform Anthropic’s Claude by mid-2024.

However, due to challenges in developing advanced AI models in-house, Amazon has decided to work with Anthropic on the upcoming Alexa redesign. The new “Remarkable” Alexa version, set to launch in October, will use Anthropic’s Claude AI models for most of its features, providing more natural conversations, personalized shopping suggestions, news summaries, and better smart home controls.

The CMA has been investigating investments in the emerging AI sector, concerned that these deals could lead to big tech companies securing a dominant position at an early stage. The regulator is still investigating Google’s investment in Anthropic and Microsoft’s deal with OpenAI.

The US Federal Trade Commission is also investigating Anthropic’s investment as part of a wider probe into AI deals by tech giants, including Alphabet and Microsoft.