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Topline
The Federal Trade Commission voted unanimously Thursday to open an investigation into the deals forged by tech giants and swiftly growing generative AI companies, including Microsoft, OpenAI, Amazon, Alphabet and Anthropic PBC.
The investigation will look at the competitive impact these deals have had on the emerging market.
Key Facts
The regulatory agency announced that it had sent compulsory orders to the five companies, seeking more information about the $10 billion deal between Microsoft and OpenAI and the investments from Amazon and Alphabet into Anthropic, worth $4 billion and $2 billion respectively.
Regulators said they will scrutinize these for information about their partnership agreements and investments, and determine the competitive impact these deals will have on the market.
The investigation will look into whether the tech giants are “distorting innovation and undermining fair competition” in the generative AI market, FTC Chair Lina Khan said in a statement.
In a statement, Microsoft said they welcomed the investigation and said their partnership with OpenAI was “promoting competition and accelerating innovation.”
Alphabet also said they encourage the inquiry, hoping that it 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.”
Anthropic and Amazon said they were not commenting on the inquiry at this time, and OpenAI has not returned a request for comment from Forbes.
Key Background
Thursday’s announcement comes after a year of massive investments into AI companies by big tech firms. Microsoft announced their partnership and $10 billion investment in OpenAI one year ago. Their relationship became even closer after OpenAI CEO Sam Altman was briefly fired by the company’s board of directors in November. Altman was eventually reinstated just four days later, after a deal that saw Microsoft gain a non-voting seat on the nonprofit’s board of directors. Regulators had begun looking into this massive deal as early as December, Bloomberg reported, shortly after the U.K.’s Competition and Markets Authority launched a preliminary inquiry into the deal as well. Anthropic, an AI startup founded by former OpenAI employees in 2021, also announced massive partnerships with two of the largest tech firms in the country: Amazon and Alphabet, the owner of Google. Amazon announced their $4 billion investment in the startup in September. Less than two months later, Alphabet announced another $2 billion investment in a deal that saw Anthropic use their newest version of Google Cloud for Claude, Anthropic’s primary AI product.
Further Reading
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