Adrian JohnsonTLDR:
– The Federal Trade Commission (FTC) has launched an inquiry into the investments made by Microsoft, Amazon, and Google in artificial intelligence (AI) start-ups OpenAI and Anthropic.
– The FTC plans to examine how these investment deals impact competition and could potentially violate antitrust laws.
The FTC has initiated an inquiry into the multibillion-dollar investments made by tech giants Microsoft, Amazon, and Google in AI start-ups OpenAI and Anthropic. These deals have allowed the companies to establish strong connections with smaller rivals while avoiding significant government scrutiny. Microsoft has invested billions of dollars in OpenAI, known for its ChatGPT product, while Amazon and Google have committed similar amounts to Anthropic. Traditionally, regulators focus on antitrust lawsuits when companies purchase rivals outright or expand into new businesses through acquisitions. However, stakes bought in start-ups are not regularly challenged. The FTC’s inquiry aims to understand how these investment deals impact competition and may potentially inform future antitrust investigations. The agency will require Microsoft, OpenAI, Amazon, Google, and Anthropic to explain their level of influence over their partners and provide internal documents related to the deals and their impact on competition. FTC Chair Lina Khan believes the study will determine if investments and partnerships pursued by dominant firms distort innovation and undermine fair competition. The investigation marks the FTC’s first major effort to understand how partnerships and investments are used by companies to rapidly expand their influence in AI. Lina Khan has spearheaded efforts to modernize antitrust law since her appointment in 2021, including filing an antitrust suit against Amazon for raising prices artificially and advocating for novel theories on how corporations can harm the economy.
