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Microsoft's and Amazon's AI partnerships draw UK watchdog scrutiny

LONDON (Reuters) -Britain's competition watchdog said on Wednesday it was seeking comments on the AI partnerships between Microsoft and Mistral AI, as well as between Amazon and Anthropic.

The Competition and Markets Authority also said it wanted to hear the views of third parties on Microsoft's hiring of former employees of Inflection AI and related arrangements.

Microsoft last month appointed DeepMind co-founder Mustafa Suleyman as the head of a newly created consumer AI unit and hired several employees of his Inflection AI startup.

The regulator said it had not formed any conclusions on whether the deals fell within UK merger rules or raised competition concerns.

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Microsoft said it was confident that "common business practices such as the hiring of talent or making a fractional investment in an AI start-up promote competition and are not the same as a merger".

"We will provide the UK Competition and Markets Authority with the information it needs to complete its inquiries expeditiously," a spokesperson said.

Amazon said it was "unprecedented for the CMA to review a collaboration of this type".

"Unlike partnerships between other AI startups and large technology companies, our collaboration with Anthropic includes a limited investment, doesn’t give Amazon a board director or observer role, and continues to have Anthropic running its models on multiple cloud providers," a spokesperson said.

The CMA is already looking into Microsoft's partnership with Open AI and asked for views in December.

"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," it said on Wednesday.

It said the move to examine the Microsoft-Mistral AI and Amazon-Anthropic partnerships comes after it identified "an interconnected web" of over 90 partnerships and strategic investments involving the same companies in a recent report on AI Foundation Models.

The U.S. Federal Trade Commission in January had ordered OpenAI, Microsoft, Alphabet, Amazon and Anthropic to provide information on recent investments and partnerships involving generative AI companies and cloud service providers.

The CMA is inviting views by May 9. This forms the first part of its information gathering process and comes before the start of a formal investigation.

(Reporting by Yadarisa Shabong in Bengaluru and Paul Sandle and Martin Coulter in London; Editing by Savio D'Souza, Devika Syamnath and Emelia Sithole-Matarise)