| “Partnerships” between big tech firms and AI startups are under the regulatory microscope. The likes of Amazon, Google, and Microsoft have rushed to build strong collaborations with the rising stars of the AI world, such as OpenAI, Mistral AI, and Stability AI. These partnerships come in many shapes and forms, but they often revolve around the use of each other’s tech stacks. Sometimes, they come with investments from big tech companies into startups, but not always. The UK’s Competition Markets Authority identified 90 of these relationships in a recent report. Many probably don’t formally fall under current merger rules, which examine company tie-ups based on market turnover and share. For example, if two companies have a combined global turnover of over €5 billion, their transaction will likely be reviewed by the European Commission. The EU executive has reportedly dropped a merger investigation into Microsoft’s investment and partnership with OpenAI but is still examining an anticompetition angle. But the UK’s CMA hasn’t given up on the merger angle. This week, it announced an inquiry into an Amazon and Anthropic deal – which saw $4 billion invested in the US startup – as well as into Microsoft’s arrangements with Mistral and Inflection AI. It is also awaiting responses from OpenAI and Microsoft on their collaboration, after it launched an inquiry in December 2023. The interesting feature of these partnerships, other than the mystery maintained by somewhat cagey companies, is vertical integration. Most of them involve some exclusive or “primary” use of a big tech company’s resources for the startup to train their algorithms on. | 