The U.S. Federal Trade Commission (FTC) has started an official investigation. They are looking into investments and partnerships that major technology companies have made to develop Artificial Intelligence (AI). Microsoft is one of the companies being investigated for its AI development funding and partnerships.
What is the FTC looking for?
The FTC has issued orders to companies like Microsoft, OpenAI, Alphabet (Google’s parent company), Amazon, and the AI startup Anthropic. They are requesting information regarding recent investments and partnerships involving generative AI companies and the main cloud service providers.
This research aims for the FTC to understand better these relationships and how they might impact competition in the technology industry, particularly concerning AI companies.
FTC Chairwoman Lina M. Khan stated,
Our study will shed light on whether the investments and partnerships pursued by dominant companies risk distorting innovation and undermining fair competition.”
This indicates the FTC’s focus on ensuring fair competition and innovation within the technology sector, especially in AI.
The role of Microsoft and OpenAI
Microsoft’s investments and its current partnership with OpenAI are likely to be closely scrutinized in the FTC study. Microsoft started investing in OpenAI in 2019. By 2023, it had begun leveraging OpenAI’s AI models, such as ChatGPT and DALL-E, for its services, including various Copilot (formerly Bing Chat) initiatives.
Apart from the FTC, reports suggest that the US Department of Justice is also contemplating investigating the partnership between Microsoft and OpenAI to assess if it violates antitrust laws.
In December 2023, the UK Competition and Markets Authority requested Microsoft and OpenAI, along with other interested parties, to provide comments to the regulatory body. This indicates a broader interest in understanding the implications of such partnerships within the technology sector.
In response to the FTC investigation, Rima Alaily, Corporate Vice President of Microsoft’s Competition and Market Regulation Group, issued a statement saying:
“The United States has assumed a global leadership position in AI because major American companies are working together. Partnerships between independent companies such as Microsoft and OpenAI, as well as many others, are promoting competition and accelerating innovation. We look forward to providing the FTC with the information it needs to complete its study.”.