U.S. to open broad antitrust probe into AI giants: source
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Lina Khan and Jonathan Kanter at the Brookings Institute on Oct 4, 2023. Photo by Drew Angerer/Getty Images
U.S. regulators are moving ahead with antitrust investigations into the roles that Microsoft, OpenAI, and Nvidia play in the artificial intelligence industry, per a source familiar with the matter.
Why it matters: The broad probe shows the intensifying scrutiny of AI and regulators' concern of the technology's concentration within some of the largest companies in the world.
- The divvying up of the cases was first reported by the New York Times.
Zoom in: The Justice Department will investigate whether AI chipmaker Nvidia's conduct has violated antitrust laws, the source said.
- The FTC will examine OpenAI and Microsoft's conduct in regard to their AI partnership.
- First reported by The Wall Street Journal, the FTC is investigating whether Microsoft structured its investment in Inflection AI to avoid a government antitrust review of the transaction, per a source familiar with the matter.
- Microsoft, separately, has invested $13 billion into OpenAI, the maker of ChatGPT.
Catch up quick: The FTC has already opened other investigations into companies using AI.
- The agency said in January that it launched a probe into Alphabet/Google, Microsoft, Amazon, OpenAI and Anthropic to seek anticompetitive behavior into its partnerships and investments.
- The FTC then said in July that it's opening an investigation into risk management at OpenAI.
What we're watching: The two-pronged investigation by U.S. regulators is a setback for the companies involved, at a time when AI has turbocharged their stock prices.
- A Nvidia spokesperson declined to comment. The DOJ and FTC declined to comment.
- "Our agreements with Inflection gave us the opportunity to recruit individuals at Inflection AI and build a team capable of accelerating Microsoft Copilot," Microsoft said in a statement.
- "We take our legal obligations to report transactions under the HSR Act seriously and are confident that we have complied with those obligations," Microsoft added.
💭 Ashley's thought bubble: This is a new chapter of federal agencies aiming to dissuade consolidation of power, focused on the powerful AI technologies of today as antitrust cases focused on tech conduct of the past continue.
- Years ago, the DOJ and FTC similarly divvied up cases focused on the structure and power of Google, Amazon, Apple and Meta, cases which have had a spotty track record of success and are not yet over.
Editor's note: This story was updated with Microsoft's response.
