The U.K.’s Competition and Markets Authority has begun a preliminary investigation into whether Microsoft Corp and Amazon.com Inc.’s relationship with a number of AI startups breach the country’s merger rules.

The two tech giants have invested millions of dollars into several AI startups. That includes Microsoft’s new ties with the Paris-based startup Mistral AI. The company, launched by former employees of Meta Platforms Inc. and Google DeepMind, is already valued at more than $2 billion. Microsoft has also sunk money into Inflection AI Inc., another promising firm in the large language model market.

Amazon’s bets have been with the safety and research AI company Anthropic, which has so far worked on research related to AI-engineered dystopias to a large language model that has been touted as having “near-human levels of comprehension.” It was recently reported that the company’s LLMs will soon be brought to Amazon Web Services Inc.

The Competition and Markets Authority, or CMA, said it’s looking into whether these partnerships can be classified as mergers. The watchdog will look at this from a standpoint of how the relationships might affect the U.K.’s own fast-growing AI industry, something Microsoft has given a boost to with a series of hefty investments.

The probe will extend further than those deals. The CMA said it has identified a trend of relationships in the AI market in which a network of about 90 partnerships has been formed, what it called an “interconnected web.”

“Foundation models have the potential to fundamentally impact the way we all live and work, including products and services across so many U.K. sectors – healthcare, energy, transport, finance, and more,” said Joel Bamford, the CMA’s executive director of mergers. “So open, fair, and effective competition in foundation model markets is critical to making sure the full benefits of this transformation are realized by people and businesses in the U.K., as well as our wider economy where technology has a huge role to play in growth and productivity.”

Such partnerships have not gone unnoticed in the U.S. Earlier this year, the Federal Trade Commission launched its own probe into some of the biggest names in tech and their investments in various generative AI firms.

Photo: Edge2Edge Media/Unsplash