Microsoft, OpenAI, and Nvidia face increasing antitrust scrutiny for their participation in the artificial intelligence business after US regulators reportedly agreed to investigate the companies.
According to the New York Times, the US Department of Justice (DoJ) and the Federal Trade Commission (FTC) have reached an agreement on investigations against the leading players in the AI sector, which is likely to be concluded in the coming days.
The Department of Justice will lead the investigation into whether Nvidia, the largest manufacturer of chips used to train and operate AI systems, violated antitrust rules designed to ensure fair competition in business and avoid monopolies, the New York Times reported on Wednesday.
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Meanwhile, the FTC will investigate OpenAI, the company that developed the ChatGPT chatbot, and Microsoft, OpenAI’s largest investor and a significant financial backer of other AI businesses.
The Wall Street Journal also reported on Thursday that the FTC is looking into whether Microsoft structured its recent transaction with company Inflection AI to avoid an antitrust investigation.
In March, Microsoft hired Inflection’s CEO and co-founder, UK entrepreneur Mustafa Suleyman, to lead a new AI branch and agreed to pay his company $650 million (£508 million) to license its AI software.
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The FTC has previously expressed an interest in the AI business. In January, it requested OpenAI, Microsoft, Google’s parent Alphabet, Amazon, and startup Anthropic to give information on recent investments and collaborations between generative AI startups and cloud service providers.
Last year, it launched an investigation into OpenAI, alleging that the company violated consumer protection rules by jeopardizing personal reputations and data.
Jonathan Kanter, the chief of the Department of Justice’s antitrust section, told the Financial Times on Thursday that the organization would look “with urgency” at the AI sector, examining “monopoly choke points and the competitive landscape” of the technology.
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Kanter stated that regulators must move rapidly to ensure that large tech giants do not dominate the industry.
The rumors came as Nvidia’s worth hit $3 trillion for the first time on Wednesday, surpassing Apple.
Rebecca Haw Allensworth, a professor at Vanderbilt Law School, said the alleged collaboration between the Department of Justice and the Federal Trade Commission represented a more collaborative relationship under the Biden administration.
“It used to be that the agencies divided the cases according to industry, but with this market being so large and important for antitrust enforcement, they are sharing responsibility and working hand-in-glove,” she stated. “There is no doubt that the agencies see AI as the next frontier of anticompetitive conduct by firms already seen as avoiding and suppressing competition.”
Microsoft said it was “confident” it had met its antitrust commitments under the Inflection deal. The FTC, DOJ, Nvidia, and OpenAI declined to comment.
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