The UK’s Competition and Markets Authority (CMA) has now officially begun a probe into Alphabet’s $2 billion investment in the AI startup Anthropic. As market competition continues to come under scrutiny with the ever more powerful role of major tech firms including Alphabet Inc., this investigation ensues.
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Anthropic’s investors include Alphabet, the parent company of Google and YouTube, who initially invested $500 million and committed to putting $1.5 billion into the company through time. Sister Real IT Investment is consistent with Alphabet’s strategic step to strengthen its position in artificial intelligence as it competes with Microsoft, OpenAI and Amazon.
The CMA began looking at Alphabet’s deal with Anthropic in July 2023, to understand whether this would mean the company might abuse its market position in the UK. By December 19, a decision will be made on whether to drive the probe forward.
AI Investment Race: Alphabet vs. Big Tech
With Alphabet investing in Anthropic, its AI race continues. Anthropic is developing advanced AI models that could rival those of OpenAI’s ChatGPT or Amazon’s Claude, founded by former OpenAI executives Dario and Daniela Amodei. The investment in Anthropic is one part of Alphabet’s broader push to stay on top in AI as it has become increasingly baked into Alphabet’s platforms, including YouTube.
UK regulators cleared Amazon’s $4 billion investment in Anthropic but Alphabet is facing major regulatory expenses. Particularly keen to watch the UK’s fast growing AI sector, the UK’s CMA is paying special attention to whether Alphabet’s strong connections with AI start-ups could crimp competition in such an expanding market. Other than Alphabet, the under microscope of expansive AI investment is Google and YouTube, which are both owned by Alphabet.
YouTube Stock and Alphabet’s Future in AI
This investigation could significantly impact Alphabet’s effort to build out its AI capabilities. Investors will be watching the CMA’s decision closely because Alphabet’s stock, including YouTube stock, is so dependent on new advances in AI and tech.
Where regulators around the world are increasingly worried about those with the power to control the AI industry becoming consolidated, the CMA’s inquiry follows a wider global trend. Spokeswomen for Microsoft Corp., Amazon.com Inc. and other U.S. tech giants recently have declined to comment on their cooperation with AI to combat the coronavirus pandemic due to it being in “early stages,” but say they’re working with others to advance AI research.
However, Alphabet is no less committed to AI, even if regulations are difficult. The company is betting Anthropic is a group capable of creating AI technologies that can change the way industries work, complement services on its platforms (including YouTube), and compete with OpenAI and Microsoft.
Alphabet’s role in the future of tech, which AI is shaping, is at the front. The CMA’s final decision on the Alphabet investment will not just affect Alphabet’s standing in the AI market, but it will also be a signal to what the regulatory path for future AI partnerships will be.
