Amazon.com Inc’s US$4 billion investment pact with artificial intelligence (AI) firm Anthropic risks being hampered in the UK after competition watchdogs said the impact of the partnership needs more scrutiny.

The Competition and Markets Authority (CMA) said on Thursday it was opening a formal “phase one” merger probe, and set a Oct 4 deadline on whether to escalate it to a more serious in-depth investigation. 

Amazon has twice invested in the builder of AI tools, which is able to generate text and analysis. As part of the tie-up, Anthropic agreed to use Amazon Web Services data centres to power some of its operations, and to use Amazon’s custom-built computer chips. 

The move follows the agency’s scrutiny of Microsoft Corp’s investment into Inflection AI and OpenAI. The CMA was swift to act on big tech’s AI pile-on, after it found a pattern of investment, and highlighted worries the companies may use this as a way to influence the nascent industry in the future. 

Amazon said in a statement it was “disappointed” that the CMA had decided not to draw a line on its evaluation of the partnership.

“Amazon’s collaboration with Anthropic does not raise any competition concerns or meet the CMA’s own threshold for review,” the company said.

Amazon’s investment is also under scrutiny in the US by the Federal Trade Commission, which has sent subpoenas to the company. This is part of a wider probe, that includes Alphabet Inc and Microsoft, into a series of transactions that cemented allowances between the world’s cloud-services giants and the leading developers of AI software. 

Meanwhile, the CMA has also opened an initial investigation into Alphabet’s Google’s investments into Anthropic.

Anthropic was formed in 2021 by former employees of OpenAI, including Daniela Amodei and her brother Dario, who serves as its chief executive officer. The company has since become one of OpenAI’s most formidable competitors, raising billions in funding. 

“Our strategic partnerships and investor relationships do not diminish our corporate governance independence or our freedom to partner with others,” an Anthropic spokesperson said. “Amazon does not have a seat on Anthropic’s board, nor does it have any board observer rights.”

  - Bloomberg