CMA Seeks Views on AI Partnerships and Other Arrangements

The Competition and Markets Authority (CMA) has today opened invitations to comment (ITCs) for interested third parties to give their views on whether the partnerships between Microsoft and Mistral AI, and Amazon and Anthropic, as well as Microsoft’s hiring of former employees and related arrangements with Inflection AI, fall within UK merger rules and the impact that these arrangements could have on competition in the UK.

The ITCs, which are the first part of the CMA’s information gathering process, come in advance of the launch of formal Phase 1 reviews. An ITC does not start the formal Phase 1 review, nor does it necessarily mean the CMA has jurisdiction.

The announcement today follows a recent report published by the CMA which outlines 3 key interlinked risks to open, fair and effective competition in the markets for AI Foundation Models (FMs) – specifically, concerns that partnerships involving key players could be exacerbating existing positions of market power through the FMs value chain.

In its report, the CMA identified an interconnected web of over 90 partnerships and strategic investments involving the same firms. Though these partnerships have the potential to bring pro-competitive benefits, the CMA remains vigilant against the possibility that incumbent technology firms could use partnerships and investments to shield themselves from competition.

As outlined in the report, not all partnerships or arrangements will fall within the merger rules. Where the CMA considers that a partnership and/or arrangement may fall within UK merger rules and may give rise to competition concerns in the UK, the CMA may open an investigation to assess these.

The CMA is now inviting views by Thursday 9 May on whether the partnerships and other arrangements between Microsoft and Inflection AI, Amazon and Anthropic, and Microsoft and Mistral AI result in the creation of relevant merger situations and, if so, the impact of these deals on competition in the UK.

Joel Bamford, Executive Director of Mergers at the CMA, said:

Today we’re inviting comments into the partnerships between Microsoft and Mistral AI, Amazon and Anthropic, and Microsoft’s hiring of former employees and related arrangements with Inflection AI. We will assess, objectively and impartially, whether each of these 3 deals fall within UK merger rules and, if they do, whether they have any impact on competition in the UK.

Foundation Models have the potential to fundamentally impact the way we all live and work, including products and services across so many UK sectors – healthcare, energy, transport, finance and more. So open, fair, and effective competition in Foundation Model markets is critical to making sure the full benefits of this transformation are realised by people and businesses in the UK, as well as our wider economy where technology has a huge role to play in growth and productivity.

Given the global nature of these markets, competition authorities around the world are actively looking into AI.

The CMA recently committed to step up the use of its merger control powers as part of its recent Foundation Models update. While we remain open minded, and haven’t drawn any conclusions, our aim is to better understand the complex partnerships and arrangements at play.

The CMA is also considering feedback received earlier this year on Microsoft’s partnership with OpenAI and is currently waiting for information it has requested from the firms. The CMA has not yet opened a formal Phase 1 review of the deal.