Nandini Roy Choudhary, writer
In brief
- According to a source who spoke with CNBC, the Federal Trade Commission and the Justice Department plan to launch antitrust investigations into Microsoft, OpenAI, and Nvidia, looking into the impact of these three large corporations on the artificial intelligence sector.
- According to the source, the FTC will lead the probe against Microsoft and OpenAI, while the DOJ will concentrate on Nvidia. The focus of the investigations will be on the firms’ actions rather than mergers and acquisitions.
A source informed CNBC that the Federal Trade Commission and Justice Department will investigate Microsoft, OpenAI, and Nvidia for their influence on the artificial intelligence business.
According to the source, the FTC will investigate Microsoft and OpenAI, the DOJ and Nvidia, and their conduct, not mergers and acquisitions.
Investigation coverage began with the New York Times.
As generative AI startups like OpenAI and Anthropic, which created the ChatGPT and Claude chatbots, gain steam, tech giants like Google, Microsoft, Amazon, and Meta race to integrate the technology to stay ahead in a market expected to top $1 trillion in revenue within a decade.
Microsoft first contributed $1 billion in OpenAI in 2019. Since then, its investment has reached $13 billion. Microsoft’s Copilot chatbot largely employs OpenAI’s model and offers open-source models on Azure.
AI models are expensive to construct and train, requiring thousands of Nvidia-made chips. Meta, which created Llama, is investing heavily in Nvidia’s graphics processing units, contributing to the chipmaker’s 250% revenue growth year-over-year.
Days after an open letter from current and former OpenAI employees expressed concerns about the AI industry’s rapid advancement without oversight or whistleblower protections, the antitrust investigation was announced.
The employees wrote that “AI companies have strong financial incentives to avoid effective oversight, and we do not believe bespoke structures of corporate governance are sufficient to change this,” adding that the companies “currently have only weak obligations to share some of this information with governments and none with civil society We doubt all will share it voluntarily.”
In January, the FTC announced research on AI industry leaders such as Amazon, Alphabet, Microsoft, Anthropic, and OpenAI.
At the agency’s AI tech summit in January, FTC Chair Lina Khan called the inquiry a “market inquiry into the investments and partnerships being formed between AI developers and major cloud service providers.”
The regulator can investigate AI companies apart from its law enforcement arm and make civil investigative demands by conducting a 6(b) study under Section 6(b) of the FTC Act. Companies might be ordered by the agency to file reports and answer business inquiries in writing by the agency.
“At the FTC, the rapid development and deployment of AI is informing our work across the agency,” Khan added. “There’s no AI exemption from the laws, and we’re looking closely at how companies may be using their power to thwart competition or trick the public.”
OpenAI declined comment. Microsoft and Nvidia declined to comment.
Source: CNBC News
