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Federal Trade Commission Investigates Tech Giants' A.I. Investments: Scrutiny on Microsoft, Amazon, and Google's Ties with OpenAI and Anthropic

Rahul Chavan, News Editor

Federal Trade Commission. Photo//Shutterstock, T. Schneider

The Federal Trade Commission (FTC) has initiated an inquiry into the substantial investments made by tech giants Microsoft, Amazon, and Google in artificial intelligence (A.I.) startups OpenAI and Anthropic. The move expands the regulatory focus on the influence these companies exert in the A.I. sector. The investments have allowed the tech giants to establish significant connections with smaller A.I. firms, avoiding extensive government scrutiny.

Microsoft has invested billions in OpenAI, the creator of ChatGPT, while Amazon and Google have committed billions to Anthropic, another prominent A.I. startup. Traditionally, antitrust lawsuits targeted acquisitions that led to increased prices for consumers, and the FTC's inquiry aims to understand how these investment deals alter the competitive landscape.

FTC Chair Lina Khan emphasized that the study would explore whether investments and partnerships by dominant companies risk distorting innovation and undermining fair competition. This inquiry represents the agency's first major effort to comprehend how partnerships and investments contribute to the tech giants' expanding influence in the A.I. sector.

The regulatory scrutiny is not limited to the United States, as international regulators are also investigating the tech companies' investments in A.I. start-ups. The UK's Competition and Markets Authority and the European Commission are examining the Microsoft-OpenAI deal to determine its potential impact on competition.

As part of the inquiry, the FTC will request information from Microsoft, Amazon, Google, OpenAI, and Anthropic regarding their influence over each other and the decision-making process. The agency will also seek internal documents that shed light on the deals and their potential effects on competition.

Microsoft, Amazon, and Google have responded to the inquiry with varied statements. Microsoft emphasized its commitment to fostering A.I. innovation and competition through partnerships like the one with OpenAI. Google expressed hope that the study would shed light on companies that have a history of "locking in customers." Amazon and OpenAI chose not to comment, while Anthropic did not respond to requests for comment.

The ties between tech giants and A.I. start-ups gained increased attention in November, when OpenAI's board ousted its CEO, raising questions about Microsoft's influence. Microsoft's President, Brad Smith, clarified that their partnership with OpenAI was distinct from an acquisition and emphasized the preservation of independence for both companies.

The study initiated by the FTC could potentially lead to a formal investigation into whether the deals between the companies violate antitrust laws. The agency has been in discussions with the Justice Department to determine which agency will examine the Microsoft-OpenAI deal. This move is seen as an attempt by the FTC to proactively address competition concerns in the evolving A.I. market.

In a parallel development, the FTC has also opened an investigation into ChatGPT, focusing on whether the technology could be used to commit fraud. The findings of the inquiry into A.I. investments may contribute to ongoing efforts by regulators to adapt antitrust laws to the challenges posed by the tech industry.


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