US FTC Launches Probe Into Billion-Dollar AI Investments in Silicon Valley

The U.S. Federal Trade Commission (FTC) has initiated an inquiry into the relationships between major AI startups, including the likes of OpenAI, and tech giants like Amazon, Google, and Microsoft.

The focus is on assessing whether the large-scale investments made by these tech giants in AI startups are enabling them to exert undue influence and gain privileged access, potentially shadowing fair competition.

“We're scrutinizing whether these ties enable dominant firms to exert undue influence or gain privileged access in ways that could undermine fair competition," said Lina Khan, Chair of the U.S. Federal Trade Commission.

The FTC issued "compulsory orders" to Amazon, Google, and Microsoft, along with AI startups Anthropic and OpenAI, probing their involvement in the generative AI sector, which has witnessed a surge in demand for technologies like chatbots and other AI tools producing new content, requiring them to disclose information about their agreements and decision-making processes.

The five companies involved have 45 days to provide information regarding their partnerships and strategic decisions.

Microsoft's long-standing relationship with OpenAI is a well-known example of such partnerships, with Google and Amazon entering multibillion-dollar deals with Anthropic, another San Francisco-based AI startup. The EU and the UK are also scrutinizing these relationships, exploring potential antitrust concerns.

Microsoft's investment in OpenAI, undisclosed in total dollar amount, involves not only financial support but also computing resources. It started with the first funding in 2019. The governance structure of OpenAI, initially a non-profit research institute, became a subject of inquiry after CEO Sam Altman's temporary ouster and subsequent reinstatement.