Amazon’s $4 billion investment in AI startup Anthropic comes under UK scrutiny

Amazon had poured about $4 billion into Anthropic by the end of March, gaining a minority ownership position in the startup as it jockeys for position in the AI arms race with the likes of Alphabet’s Google, Microsoft and ChatGPT maker OpenAI. Google last year agreed to invest up to $2 billion in Anthropic.

For Amazon, the funding marked its largest investment in another company since the e-commerce giant was founded three decades ago. Big Tech firms have been splurging on AI startups for years to get their hands on what they see as promising AI features that they hope to cash in on further down the line. However, those investments are increasingly the focus of regulators on both sides of the Atlantic.

The U.K’s Competition and Markets Authority said it was seeking to establish whether Amazon’s ties with Anthropic should be considered a de facto merger that might stifle competition in the U.K. An initial decision is due by Oct. 4.

An Amazon spokesperson said the company’s ties to Anthropic didn’t raise any competition concerns or meet the CMA’s own threshold for a review. Amazon doesn’t hold a board seat or decision-making powers at the startup, meaning Anthropic is free to work with any other partner of its choosing, the spokesperson said.

“Building models is expensive, and companies like Anthropic need access to a substantial amount of capital to train these models," the Amazon spokesperson said. “By investing in Anthropic, Amazon, along with other companies, is helping Anthropic expand choice and competition in this important technology."

A spokesperson for Anthropic said the startup remained an independent company since Amazon doesn’t have a seat on Anthropic’s board or any board observer rights. “Our strategic partnerships and investor relationships do not diminish our corporate governance independence or our freedom to partner with others," the Anthropic spokesperson said.

The U.K. probe comes weeks after British officials launched a separate inquiry into Microsoft’s ties with and hiring of former employees from Inflection AI, underscoring growing pressure that tech giants face to justify their arrangements with AI startups.

British antitrust officials are also looking into whether Microsoft’s partnership with OpenAI should be considered a de facto merger. Closer scrutiny has already forced Microsoft to loosen the strings on some arrangements. Last month, the group relinquished its seat as an observer on OpenAI’s board after Microsoft realized its position had unsettled some antitrust officials.

In the U.S., the Federal Trade Commission launched an inquiry into generative AI partnerships earlier this year, ordering companies to provide information regarding recent investments into startups.

News Corp, owner of Dow Jones Newswires and the Journal, has a content-licensing partnership with OpenAI.

Write to Mauro Orru at mauro.orru@wsj.com