June 20, 2024


The rapid rise of artificial intelligence has been led by a few key players in the tech world: Microsoft, OpenAI, and chipmaker Nvidia. Now, they’re all coming under federal scrutiny for their outsized dominance of the market.

The New York Times, citing unnamed sources familiar with the matter, reports that the Department of Justice and the Federal Trade Commission have struck a deal that will allow them to carry out antitrust investigations into the companies’ roles in the AI industry.

Under the agreement, the Justice Department will spearhead the investigation into whether Nvidia — which is world’s leading AI chipmaker — has violated antitrust laws. And the FTC will look into OpenAI and Microsoft’s potentially anticompetitive behavior in the space, The Times reported. Both agencies share antitrust responsibilities.

Microsoft, which has a $13 billion investment in OpenAI, is already being investigated by the FTC for its deal with Inflection AI, The Wall Street Journal reports, citing an unnamed source familiar with the matter and other records. The tech giant has hired two of Inflection AI’s co-founders to lead a new unit called Microsoft AI, and reportedly hired a slew of its staff and paid the startup roughly $650 million to resell its technology under a licensing agreement. While any merger valued at more than $119 million has to be reported to federal antitrust enforcement agencies, the FTC is examining whether Microsoft’s deal with Inflection AI was structured to avoid antitrust safeguards.

Read more: Former OpenAI employees say AI companies pose ‘serious risks.’ Read their open letter

The moves are part of an ongoing regulatory crackdown on the tech industry, and the nascent AI sector, spearheaded by FTC Chair Lina Khan. In January, the regulator opened inquiries into five generative AI companies — Google parent Alphabet, Amazon, Anthropic, Microsoft, and OpenAI — requiring them to share information about recent investments and partnerships with generative AI companies and major cloud services providers.

Khan said at the time that the study “will shed light on whether investments and partnerships pursued by dominant companies risk distorting innovation and undermining fair competition.”

“The AI space … is so fast moving,” Khan said in an interview with Harvard Law in February. “And so, we really want to make sure that the opportunity for competition and the potential for disruption is preserved, rather than this moment being co-opted by some of the existing dominant firms to double down on their dominance.”



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