A recent news report by The New York Times has brought Microsoft, OpenAI, and Nvidia into the spotlight, as the US Justice Department and the Federal Trade Commission (FTC) are making moves to investigate potential antitrust violations in the artificial intelligence industry. These developments are anticipated to be finalised in the near future, according to The New York Times.
The primary focus of the investigation will be on Nvidia, a leading manufacturer of chips used in training and running AI systems. The Justice Department will be taking the lead in examining whether Nvidia has violated antitrust laws governing fair competition and the prevention of monopolies.
Simultaneously, the FTC will be closely scrutinising OpenAI, the company responsible for the development of the ChatGPT chatbot, as well as Microsoft, which is both a major investor in OpenAI and a significant financial supporter of other AI firms. The Wall Street Journal also reported that the FTC is looking into whether Microsoft structured a recent deal with startup Inflection AI in a manner that would evade antitrust scrutiny.
Specifically, the agreement between Microsoft and Inflection AI involved the recruitment of Inflection’s CEO and co-founder, Mustafa Suleyman, by Microsoft to head a new AI division. Moreover, Microsoft agreed to a substantial $650 million (£508 million) payment to license Inflection AI’s software. These actions have drawn the attention of antitrust authorities.
The FTC has previously demonstrated its interest in the AI market, having recently requested information from OpenAI, Microsoft, Alphabet (Google’s parent company), Amazon, and Anthropic, concerning recent investments and partnerships in generative AI companies and cloud service providers. Furthermore, the FTC initiated an investigation into OpenAI last year over concerns related to consumer protection laws and the potential exposure of personal data.
According to Jonathan Kanter, the head of the Justice Department’s Antitrust Division, the urgent need to closely examine the AI sector is driven by the critical necessity to evaluate potential monopoly choke points and the competitive landscape within the technology industry.
Regulators are emphasising the vital importance of ensuring that powerful tech firms do not wield undue control over the market. The FTC, Department of Justice, Nvidia, OpenAI, and Microsoft have been contacted for comment, and the developments surrounding this investigation are being closely watched by industry experts and stakeholders.