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Federal Trade Commission (FTC) issued compulsory orders to major cloud service providers Microsoft, Google and Amazon and generative AI startups OpenAI and Anthropic, requiring them to provide information regarding recent investments and partnerships.

The US antitrust regulator said it was probing the multi-billion-dollar-investments made between Microsoft and OpenAI, Amazon and Anthropic, and Google and Anthropic.

The initiative is a part of regulatory endeavors aimed at ensuring that oversight adapts to advancements in artificial intelligence and  prevent dominant entities from excluding competitors in a sector poised for significant disruptions across multiple industries.

“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."

Amazon, operating through its Amazon Web Services (AWS) division, along with Microsoft and Google, stands as one of the leading providers of cloud-based data centers globally. These centers, facilitating the storage and processing of data on an extensive scale, contribute to the immense wealth of these tech giants.

In the realm of generative AI, Microsoft has been a trailblazer, making a substantial $13 billion investment in OpenAI, the entity behind ChatGPT. Following a boardroom dispute that temporarily sidelined OpenAI's CEO, Sam Altman, Microsoft secured a non-voting seat on the company's board.

Anthropic, established by former OpenAI personnel, garnered significant financial backing, with Google investing up to $2 billion. Amazon announced up to $4 billion investment in this startup, with Anthropic also agreeing to use Amazon's cloud infrastructure and chips to develop its next models.

FTC studies are intended to gain a "deeper understanding of market trends  and business practices" and any conclusions can guide the commission toward  taking legal action, the regulator said.

Microsoft Vice President Rima Alaily said it would provide the FTC with the information it requests. "Partnerships between independent companies like Microsoft and OpenAI, as  well as among many others, are promoting competition and accelerating  innovation," she added.

While Google expressed hope that the FTC "will shine a bright light on companies that don't offer the openness of Google Cloud or have a long history of locking-in customers – and who are bringing that same approach to AI services."

Earlier this year, the European Commission, the EU's executive arm, commenced a preliminary investigation into Microsoft's substantial investment in OpenAI, examining whether it might be concealing a disguised merger. In September 2023, the FTC initiated a significant case against Amazon for illegally maintaining monopoly power.

"Artificial intelligence has the potential to become antitrust's house of horrors if we do nothing," said Benoit Coeure, chairman of the French Competition Authority.

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