FTC launches an investigation into Big Tech's alliances

U.S. antitrust regulators have begun investigating the connections between well-known AI firms, such as OpenAI, the company that makes ChatGPT, and the major internet companies that have made billion-dollar investments in them.

Amazon, Google, and Microsoft are the focus of the action because of their influence over the generative AI boom, which has increased demand for chatbots like ChatGPT and other AI tools that can generate unique music and graphics.

The FTC inquires

"We are closely examining if these connections allow powerful companies to exercise excessive influence or obtain preferential access in manners that may compromise equitable competition," stated U.S. Federal Trade Commission Chair Lina Khan at the opening statement of a Thursday AI conference.

According to Khan, "the investments and partnerships being formed between AI developers and major cloud service providers" would be reviewed as part of the market probe.

The FTC announced on Thursday that it had sent "compulsory orders" to five businesses, including artificial intelligence (AI) startups Anthropic and OpenAI and cloud providers Amazon, Google, and Microsoft, requesting them to submit information regarding their agreements and the decision-making process around them.

Image Source: Reuters

Microsoft & OpenAI’s relationship

The most well-known is Microsoft's many years-long partnership with OpenAI. More recently, Google and Amazon have inked multibillion-dollar agreements with Anthropic, another AI business based in San Francisco that was founded by former OpenAI executives.

In a statement released on Thursday, Google expressed its gratitude for the FTC's investigation and made a pointed jab at Microsoft's OpenAI partnership and its track record of drawing antitrust scrutiny for its business practices.

"We hope the FTC's study 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," the company said in a statement.

Corporate vice president for competition and market regulation at Microsoft, Rimy Alaily, added that the business is eager to work with the FTC and defended such collaborations as "promoting competition and accelerating innovation."

OpenAI's governance and connection with Microsoft were called into doubt last year when the startup's board of directors abruptly ousted CEO Sam Altman, who was quickly reinstated, causing global headlines. Most of the startup's former board members resigned after a weekend of behind-the-scenes maneuvers and a feared mass staff departure supported by Nadella and other Microsoft executives helped stabilize the business.

Image Source: The Guardian