The UK's Competition and Markets Authority (CMA) has launched a formal investigation into Alphabet's $2.3 billion investment in AI startup Anthropic, citing concerns over potential anti-competitive practices. The probe marks a significant development in the regulator's efforts to tackle the growing trend of "quasi-mergers" in the tech industry, where large corporations gain control of innovative startups through strategic investments and talent acquisitions.

The CMA's investigation will focus on whether Alphabet's investment in Anthropic, which includes a reported $300 million injection last year, could harm competition in the AI market. Notably, the regulator had previously cleared a $4 billion investment in Anthropic by Amazon, citing the deal's size and scope as reasons for not pursuing an investigation.

The probe raises important questions about the boundaries of competition in the tech industry, particularly in the realm of AI development. Alphabet's investment in Anthropic has sparked concerns over the potential for large corporations to stifle innovation and limit opportunities for smaller startups.

In a statement, a Google spokesperson emphasized that Anthropic is free to use multiple cloud providers and does not have exclusive tech rights. The CMA will decide by December 19, 2024, whether to refer the case to a more in-depth "phase 2" investigation.