The Federal Trade Commission and the Department of Justice are launching antitrust investigations into Microsoft, OpenAI, and Nvidia to examine their impact on the artificial intelligence industry. The FTC will investigate Microsoft and OpenAI, while the DOJ will focus on Nvidia. The focus of the investigations will be on the companies’ conduct rather than mergers and acquisitions. This move comes as tech giants like Google, Microsoft, Amazon, and Meta race to integrate AI technology into their products to stay competitive in a market that is projected to exceed $1 trillion in revenue within a decade.
Microsoft has heavily invested in OpenAI, with its initial investment of $1 billion in 2019 growing to about $13 billion. The company uses OpenAI’s models for its Copilot chatbot and offers open-source models on its Azure cloud platform. The high investments in AI models are necessary due to the substantial costs involved in building and training them. Companies like Meta are also investing billions in Nvidia’s graphics processing units to support their own AI models. Nvidia’s revenue has seen significant growth as a result of these investments, rising by more than 250% year-over-year.
The announcement of the upcoming antitrust investigation comes shortly after a group of current and former OpenAI employees published an open letter expressing concerns about the lack of oversight and whistleblower protections in the AI industry. The employees believe that AI companies have strong financial incentives to avoid effective oversight and that current corporate governance structures are insufficient to address these issues. The FTC had previously announced in January that it would conduct a study on AI industry leaders, including Amazon, Alphabet, Microsoft, Anthropic, and OpenAI.
FTC Chair Lina Khan has described the inquiry into AI investments and partnerships between developers and major cloud service providers as a “market inquiry.” By utilizing its authority under Section 6(b) of the FTC Act, the agency can investigate AI companies separately from its law enforcement arm and issue civil investigative demands to obtain information from the companies. This allows the agency to order companies to submit reports and answer questions in writing about their businesses. Khan emphasized that AI companies are not exempt from existing laws and that the FTC is closely monitoring potential anticompetitive practices.
As the investigations unfold, Microsoft, OpenAI, and Nvidia have not yet provided official statements in response to the news. The developments underscore the increasing scrutiny that large tech companies are facing over their activities in the AI industry. The results of the investigations could have significant implications for how these companies operate and compete in the rapidly growing AI market. It remains to be seen how the companies will respond to the investigations and what measures they may take to address any concerns raised by the regulatory authorities.
