The FTC is investigating large companies investing in AI startups

AI technology requires manpower, technical know-how, hours of due diligence…. and A LOT of money. This is why some of the more prominent AI businesses on the market have heavy investments from giant companies. Well, the US Federal Trade Commission (FTC) is investigating large company investments in AI startups.

The FTC is mostly focusing on three instances of multi-billion dollar Investments in AI startups. It’s looking into Microsoft’s investments in OpenAI, Amazon’s investments in anthropic AI, and Google’s investments in anthropic AI. There may be other major investments in other AI startups, but these are the biggest examples.

The FTC is investigating large companies’ investments in AI startups

This might sound a bit sinister, but it’s not as bad as it sounds. The FTC is merely investing these investments in AI startups, so it issued an order to these companies. Mostly, this investigation aims to gain knowledge of the inner workings of these business relationships and how they affect AI moving forward. This is another example of governments wanting to get more involved with AI as the technology continues to grow and become more of a potential hazard. Investigations into these companies will help regulators and lawmakers develop sensible rules around the development of AI technology.

So, the companies under the eye of the FTC are not in trouble. “Our study will shed light on whether investments and partnerships pursued by dominant companies risk distorting innovation and undermining fair competition,” said FTC Chair Lina M. Khan. In fact, Khan also stated in an opinion piece last year that “the expanding adoption of AI risks further locking in the market dominance of large incumbent technology firms.” This is extremely true.

This is a good thing to do, as Microsoft, Amazon, and Google are no strangers to anti-competitive practices. At the end of the day, for some companies, it’s all about making profits. So, it’s very possible that one of these companies could wind up pulling deceptive or cruel practices in order to stay ahead of the competition. This investigation could be the start of some solid rules regarding large companies investing in AI startups.

Starting from the day that they receive this request, the companies will have 45 days to respond. So, each company has a month and a half to respond with all of the key information. Hopefully, this will broaden the FTC’s understanding of AI, and push companies to further develop it safely.