The U.K.’s Competition and Markets Authority (CMA) is investigating Google’s parent company, Alphabet, over its $2.3 billion investment in the AI startup Anthropic. The inquiry aims to assess whether the deal could harm competition in the fast-growing AI industry.

According to The Wall Street Journal, the CMA is concerned that Alphabet's investment might stifle competition in the AI sector. The regulator is particularly focused on ensuring that tech giants don’t dominate the market through strategic investments in smaller AI firms.

The investigation, which officially starts Friday, will be carried out in two stages. The CMA will first determine if there’s enough evidence to warrant a deeper look, with the first phase set to conclude by December 19. If the regulator decides to move forward, it will conduct a more extensive investigation before issuing a final ruling.

Google’s investment in Anthropic is part of a larger strategy to compete with major AI players like Microsoft, OpenAI, and Amazon. TechCrunch reported that Alphabet first invested $300 million in Anthropic in early 2023, followed by a $2 billion commitment later that year.

The U.K. inquiry follows a similar case where British regulators cleared Amazon’s $4 billion investment in Anthropic without a full investigation. According to Engadget, Amazon’s investment avoided further scrutiny partly because Anthropic’s U.K. turnover didn’t meet the threshold that would trigger a full-scale probe.

Microsoft’s investment in OpenAI may also face a similar UK probe soon, as regulators continue to examine how these partnerships could affect competition in the AI sector.

This investigation mirrors ongoing efforts by the U.S. Federal Trade Commission (FTC) to examine partnerships and investments in AI startups by Alphabet, Amazon, Microsoft, OpenAI, and others. The FTC’s inquiry is part of an attempt to ensure that these deals don’t create an anti-competitive environment within the AI industry.

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