The UK’s Competition and Markets Authority (CMA) has initiated an investigation into Alphabet’s investment in AI startup Anthropic over potential competition concerns.

In 2023, Google, part of Alphabet, pledged investment of $2bn to Anthropic.

The investment, which includes a $500m initial funding and a prospective additional $1.5bn, is under scrutiny for its potential to undermine market competition.

Anthropic, co-founded by former OpenAI executives Dario and Daniela Amodei, has integrated Alphabet’s Google Cloud services into its operations.

This relationship has been on the CMA’s radar since July 2024, as the authority evaluates the deal’s implications for the UK market.

The investigation began on 30 July, with the CMA inviting public comments until 13 August.

The CMA’s investigation into the Alphabet Anthropic partnership probe is a response to the broader industry trend where large tech firms acquire stakes in smaller, innovative startups.

The CMA has set a deadline of 19 December 2024, for its Phase 1 decision. This will determine whether there is sufficient evidence to warrant a more in-depth investigation into the partnership probe.

An Anthropic spokesperson told Reuters that the company plans to fully cooperate with the CMA’s inquiry.

The spokesperson said: “We are an independent company and none of our strategic partnerships or investor relationships diminish the independence of our corporate governance or our freedom to partner with others.”

Alphabet spokesperson said: “Anthropic is free to use multiple cloud providers, including ours, and we don’t require exclusive technology rights.”