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.
TakeAway Points:
- 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.
U.S. to probe Nvidia, Microsoft and OpenAI
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.
Tech giants like Google, Microsoft, Amazon, and Meta have been involved in a kind of AI arms race, racing to integrate the technology to make sure they do not fall behind in a market that is predicted to top $1 trillion in revenue within a decade, as startups like OpenAI and Anthropic, the companies behind the ChatGPT and Claude chatbots, respectively, gain traction in the generative AI market.
Microsoft, for example, made its $1 billion investment in OpenAI debut in 2019. Since then, its investment has increased to over $13 billion. Microsoft provides open-source models on its Azure cloud and heavily leverages OpenAI’s model for its Copilot chatbot.
The big outlay is required since AI models are notoriously costly to develop and train, needing thousands of specialised chips, the majority of which have come from Nvidia up to this point. The chipmaker Nvidia has seen its revenue increase by more than 250% year over year with the help of other companies, including Meta, which is building its own model dubbed Llama and has stated that it is spending billions on Nvidia’s graphics processing units.
The Antitrust Investigation
The upcoming antitrust investigation was announced a few days after a group of current and former workers of OpenAI wrote an open letter expressing concerns about the industry’s rapid advancement in the face of oversight gaps and a lack of protections for those who want to come forward as whistleblowers.
“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,” the employees wrote, adding that the companies “currently have only weak obligations to share some of this information with governments, and none with civil society. We do not think they can all be relied upon to share it voluntarily.”
The announcement also comes after the FTC decided in January to carry out a thorough investigation into major players in the AI sector, such as Amazon, Alphabet, Microsoft, Anthropic, and OpenAI.
FTC Chair Lina Khan announced the inquiry in January during the agency’s tech summit on AI, describing it as a “market inquiry into the investments and partnerships being formed between AI developers and major cloud service providers.”
The regulator can investigate AI companies independently of its law enforcement branch and issue civil investigative demands by using its jurisdiction to conduct a so-called 6(b) study, named for Section 6(b) of the FTC Act. For instance, businesses may be required by the agency to provide particular reports and provide written responses to inquiries about their operations.
“At the FTC, the rapid development and deployment of AI is informing our work across the agency,” Khan said at the time. “There’s no AI exemption from the laws on the books, and we’re looking closely at the ways companies may be using their power to thwart competition or trick the public.”
