The Federal Trade Commission, a competition regulator, is currently examining the partnerships formed between generative AI startups OpenAI and Anthropic and technology behemoths like Alphabet's Google, Amazon, and Microsoft. The purpose of the investigation is to gain a better understanding of their investments.
As it stands, Microsoft has invested $13 billion in OpenAI, while Google and Amazon have committed to infusing $2 billion and $4 billion, respectively, into Anthropic.
A study by Morgan Stanley asserts that 90% of investments in generative AI companies in 2023 came from tech giants such as Microsoft and Amazon. In contrast, these firms only contributed 40% of all investments in earlier years.
The FTC's inquiry is primarily driven by its desire to comprehend the impacts of these major partnerships on various industry aspects, like product pricing, service offering, employment, and oversight rights.
"New technologies often stimulate the creation of new markets and appear to foster healthy competition. Nevertheless, our study is a precautionary step -- ensuring that the race between corporations to develop and capitalize on AI doesn't lead to tactics that inhibit this growth," explains FTC chair, Lina Khan. "This work will help us evaluate whether the investment strategies and partnerships that large corporations pursue pose a risk to innovation and fair competition."
The FTC has ordered the five companies to respond within a timeframe of 45 days.
EU and UK competition regulators are similarly scrutinizing Microsoft's investments in OpenAI. In response to the announcement of this inquiry, OpenAI has updated their website to state that Microsoft has a "minority economic interest" in the startup, instead of referring to them as a "minority owner" as was previously written.
Addressing the FTC's inquiry, Rima Alaily, who serves as the vice president for Microsoft's competition and market regulation group, stated that the partnership with OpenAI serves to "promote competition and expedite innovation". She also added, "We look forward to providing the FTC with the information they need to successfully complete their study."
Google expressed optimism about the investigation and its potential outcomes. "We're hopeful that the FTC's study will bring to light any companies that lack the transparency of Google Cloud, have a history of imposing customer lock-ins, and appear to be applying the same approach to AI services."
