The Federal Trade Commission (FTC) and the Justice Department (DOJ) have taken a major step in their regulatory efforts, launching antitrust investigations into the roles that Microsoft, OpenAI, and Nvidia play in the quickly expanding artificial intelligence (AI) market. The FTC is set to examine Microsoft and OpenAI, while Nvidia falls under the DOJ’s purview. These inquiries aim to scrutinize business practices within the AI sector, shifting the focus from traditional merger and acquisition concerns. This development follows reports by CNBC and The New York Times, amidst an AI market boom with startups like OpenAI and Anthropic gaining prominence through their generative AI chatbots, ChatGPT and Claude.
Microsoft's investment in AI started in 2019 with a $1 billion contribution to OpenAI, and it has since increased to an estimated $13 billion. As a result, Microsoft's Copilot chatbot and other open-source models have been developed using OpenAI's technology on its Azure cloud platform. The industry’s expansion is fueled by hefty investments due to the steep costs of developing AI models and necessitates specialized chips, primarily supplied by Nvidia. Concerns over industry oversight were recently voiced by OpenAI employees through an open letter to leadership, prompting the FTC’s comprehensive study on major AI players earlier in 2024.
