US federal agencies are tightening regulatory scrutiny on tech biggies, particularly their roles in shaping the AI industry. The FTC recently launched an antitrust investigation into Microsoft over its deal with Inflection AI. The investigation is part of an agreement with the DOJ, which will examine the conduct of Nvidia, the biggest maker of AI chips. The FTC will also investigate OpenAI, the firm behind the ChatGPT AI chatbot. Microsoft is OpenAI’s largest investor.
FTC and DOJ divide responsibility to scrutinize Nvidia, Microsoft, and OpenAI
Nvidia, Microsoft, and OpenAI are currently seen as the three biggest stakeholders in the AI industry. The former makes the most advanced GPUs for AI devices and systems. The unprecedented rise in generative AI applications over the past two years has helped it almost triple its sales in no time. The company’s stock price also soared more than 200 percent, with its market capitalization exceeding $3 trillion for the first time, surpassing Apple.
Nvidia’s dominance in the AI chips market has got industry players worried. The company allegedly locks customers into using its chips through software tools, thus stifling competition. Its distribution strategy is also an area of concern for some. The United States Department of Justice (DOJ) will look into all of this. If the agency finds Nvidia abusing its dominance to gain an unfair advantage over its competitors, it may file an antitrust lawsuit against the company.
Microsoft is another tech biggie with the power to potentially shape the AI industry to its benefit. Like Nvidia, it also entered the AI fray early, investing a whopping $13 billion in OpenAI, a portion of which came before ChatGPT‘s launch. The Windows maker has also struck deals with other AI companies. In March, it hired almost all of Inflection AI’s employees, including the two co-founders, and paid the company $650 million to license its AI technologies.
The FTC is studying this deal to determine whether Microsoft deliberately structured it this way to avoid potential antitrust inquiry. Instead of acquiring the firm, the company only hired its employees and signed a tech licensing deal. Inflection AI says it is still a completely independent company. However, the FTC isn’t buying anything and is seeking relevant documents to ascertain if Microsoft has gained control over the AI startup while dodging regulatory review.
The FTC will also investigate OpenAI
Microsoft owns 49 percent of OpenAI, whose ChatGPT powers several AI tools. American regulators are worried that Microsoft may be able to influence OpenAI’s technologies and developments. The FTC will investigate this partnership over potential antitrust violations. These investigations don’t necessarily mean the two regulatory agencies will file cases against the three companies. However, the FTC and DOJ did something similar in 2019 and proceeded to sue Google, Apple, Amazon, and Meta, so you never know.
2024-06-07 15:06:55