The Federal Trade Commission (FTC) and the Justice Department (DOJ) are initiating antitrust investigations into Microsoft, OpenAI, and Nvidia, according to a source confirmed to CNBC. The investigations will scrutinize these influential companies’ roles in the burgeoning artificial intelligence (AI) industry, focusing on their business practices rather than mergers and acquisitions.
The FTC will lead the inquiries into Microsoft and OpenAI, while the DOJ will concentrate on Nvidia. This development was first reported by The New York Times.
The AI industry has seen rapid growth, with startups like OpenAI and Anthropic — creators of the ChatGPT and Claude chatbots, respectively — gaining momentum in the generative AI sector. In response, tech giants such as Google, Microsoft, Amazon and Meta are in a fierce race to integrate AI technologies to maintain their competitive edge in a market projected to exceed $1 trillion in revenue within the next decade.
Microsoft’s involvement in AI is substantial, beginning with a $1 billion investment in OpenAI in 2019, which has now ballooned to approximately $13 billion. Microsoft’s Copilot chatbot and various open-source models on its Azure cloud platform heavily rely on OpenAI’s technology.
Read more: UK Competition Watchdog Investigates Microsoft-OpenAI Partnership
The substantial financial commitments from companies like Microsoft are driven by the high costs associated with developing and training AI models. These processes require thousands of specialized chips, predominantly supplied by Nvidia. Meta, for instance, is investing billions in Nvidia’s graphics processing units (GPUs) to support its AI model, Llama, contributing to Nvidia’s impressive year-over-year revenue growth of over 250%.
The announcement of these antitrust investigations comes shortly after an open letter was published by a group of current and former OpenAI employees. The letter expressed concerns over the AI industry’s rapid advancements and the lack of oversight, highlighting the absence of whistleblower protections for those within the industry.
“AI companies have strong financial incentives to avoid effective oversight, and we do not believe bespoke structures of corporate governance are sufficient to change this,” the employees wrote. They criticized the current regulatory framework, noting that companies “currently have only weak obligations to share some of this information with governments, and none with civil society. We do not think they can all be relied upon to share it voluntarily.”
This news also follows the FTC’s January decision to conduct a comprehensive study on major AI industry players, including Amazon, Alphabet, Microsoft, Anthropic and OpenAI.
Source: CNBC
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