The US Federal Trade Commission (FTC) has launched an inquiry into recent investments and partnerships involving generative AI companies and major cloud service providers. This move comes as lawmakers and regulators worldwide express concerns over the potential national security risks, influence operations, and fraudulent activities associated with generative AI technology.
The FTC’s investigation will focus on deals between powerful players like Microsoft, Google, and Amazon, and AI providers such as OpenAI and Anthropic, to evaluate their impact on competition. Former FTC chair William Kovacic emphasized the agency’s preparedness for potential intervention, stating that the extensive document request aims to gain insights into how these partnerships influence strategic decisions, pricing strategies, access granting, and personnel decisions.
In response to the inquiry, Microsoft expressed willingness to cooperate with the review, highlighting the collaborative efforts among American companies in advancing AI. Meanwhile, Google voiced hope that the investigation would shed light on less transparent companies and those with a history of customer lock-ins. However, Anthropic and Amazon declined to comment, and OpenAI has not yet responded to requests for comment.
The FTC’s focus on the AI industry aligns with Chair Lina Khan’s emphasis on the agency’s scrutiny of the technology to ascertain if it is dominated by a few companies. This scrutiny is particularly relevant given the significant investments by corporate giants like Microsoft and Amazon, which contributed to 90 percent of generative AI private fundraising in 2023.
Moreover, reports indicate that the US Justice Department and the FTC are in discussions over which agency should investigate ChatGPT maker OpenAI on antitrust grounds, particularly concerning its partnership with Microsoft. This concern is heightened by Microsoft’s major investment in OpenAI, which has drawn antitrust attention due to its commitment to inject billions of dollars into the AI firm last year.
In addition to these developments, Anthropic, known for developing foundation models, has secured agreements worth $4 billion from Amazon and over $2 billion from Alphabet. The funding, often in the form of cloud credits, has raised concerns within the venture and startup communities.
Opinion: Some industry experts believe that the FTC’s inquiry is necessary to ensure fair competition and prevent monopolistic practices within the AI industry. They argue that the consolidation of deals between tech giants and AI providers warrants close examination and regulatory intervention to create a level playing field for smaller players in the market.