FTC to Investigate AI Deals of Tech Giants Microsoft, Amazon, and Google

By Jace Dela Cruz

Jan 26, 2024 12:59 AM EST

The Federal Trade Commission (FTC) has initiated an inquiry into the substantial investments made by tech giants Microsoft, Amazon, and Google in artificial intelligence (AI) startups like OpenAI and Anthropic.

According to the Associated Press, the investigation aims to examine the impact of these investments on the competitive landscape and the potential distortion of innovation and fair competition.

(Photo : JUSTIN TALLIS/AFP via Getty Images)
An illustration picture taken in London on December 18, 2020 shows the logos of Google, Apple, Facebook, Amazon and Microsoft displayed on a mobile phone and a laptop screen.

Concentration of Power in AI

Microsoft's significant investment in OpenAI, the creator of ChatGPT, along with Amazon and Google's substantial commitments to Anthropic, has sparked concerns over the concentration of power in the AI sector.

"History shows that new technologies can create new markets and healthy competition. As companies race to develop and monetize AI, we must guard against tactics that foreclose this opportunity, " said FTC Chair Lina M. Khan.

"Our study will shed light on whether investments and partnerships pursued by dominant companies risk distorting innovation and undermining fair competition," she added.

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FTC's Investigation

The FTC is specifically seeking information on the agreements and strategic rationale behind each investment or partnership, the practical implications such as new product releases and governance, and the competitive impact on market share, competition, and potential sales growth.

Additionally, the inquiry will assess the competition for AI inputs and resources, including key products and services crucial for generative AI development.

The companies involved in three separate multi-billion-dollar investments under scrutiny are Microsoft and OpenAI, Amazon and Anthropic, and Google and Anthropic. 

The FTC aims to deepen its understanding of the relationships between generative AI developers and cloud service providers. The tech companies have 45 days to respond to the orders, and the findings from the inquiry will inform future actions by the commission.  

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