The US Federal Trade Commission (FTC) has opened an inquiry into the partnerships between big tech companies and artificial intelligence (AI) startups. The investigation will focus on the relationships between tech giants like Amazon, Google, and Microsoft, and AI startups such as ChatGPT-maker OpenAI. The inquiry aims to determine whether these ties allow dominant firms to exert undue influence or gain privileged access that could undermine fair competition.
The growing demand for AI tools, including chatbots like ChatGPT and other AI tools that can produce novel imagery and sound, has fueled a boom in the generative AI sector. Companies like Amazon, Google, and Microsoft have invested billions of dollars in AI startups to leverage their expertise and technologies in this field.
The FTC’s market inquiry will review the investments and partnerships formed between AI developers and major cloud service providers. To gather information, the FTC has issued compulsory orders to Amazon, Google, Microsoft, and AI startups Anthropic and OpenAI, requiring them to disclose details about their agreements and decision-making processes.
Microsoft’s long-standing relationship with OpenAI is the most well-known partnership in this sector. However, Google and Amazon have also recently made multibillion-dollar deals with Anthropic, another San Francisco-based AI startup founded by former leaders at OpenAI.
The European Union (EU) and the United Kingdom (UK) have already signaled their scrutiny of Microsoft’s OpenAI investments. Both jurisdictions have raised concerns that these partnerships could harm competition and trigger investigations under antitrust regulations.
The actions by the FTC and European authorities have been welcomed by antitrust advocates who criticize these deals as quasi-mergers. They argue that big tech firms are finding ways to exert influence without officially acquiring top AI companies.
The FTC’s investigation will shed light on the competitive dynamics involved in these partnerships and the consolidation of market power in the AI industry. The regulators are particularly concerned about the potential for dominant firms to lock in their dominance during this market tipping moment.
The companies involved in the inquiry have 45 days to provide information to the FTC, including partnership agreements, strategic rationale, decision-making processes, and key resources and services required for building AI systems.
Microsoft CEO Satya Nadella has described the partnership with OpenAI as a complicated thing and highlighted that Microsoft’s investment goes beyond just dollars and includes providing computing power and infrastructure.
The FTC has been actively monitoring and addressing illegal behavior in the use and development of AI tools. The regulators aim to crack down on harmful practices while also scrutinizing the concentration of market power among a few dominant AI leaders.
While the inquiry is still ongoing, it represents a significant step in examining the ties between big tech companies and AI startups. The results of the investigation could have far-reaching implications for the AI industry and competition in the market.
