Microsoft, OpenAI, Amazon Get 45 Days From FTC To Submit Detailed Inquiry Report

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In a move that seeks to understand big tech’s investments into A.I. as much as it can, the Federal Trade Commission (FTC) on Thursday asked mega caps Microsoft, Alphabet, Amazon, OpenAI and Anthropic to provide details about their partnerships with each other.

Following the splash made by ChatGPT and the subsequent drama at OpenAI, the FTC stated in its press release that it aims to understand whether the deals will impact competition surrounding A.I. development.

FTC Seeks Deep Reaching Questions From Microsoft & Amazon Over Their A.I. Investments

Unlike Amazon’s deals with Anthropic, OpenAI’s status as a non-profit has complicated its relationship with Microsoft and generated troubles within management that led to the rapid ousting and return of CEO Sam Altman late last year. Tech giants Microsoft and Amazon have earmarked billions of dollars for the firms, and the urge to commercialize A.I. to generate revenue is strong within their mega boards.

Now, the pair and their partner firms will have to share details about their agreements with the FTC. Amidst the multitude of facts surrounding the nature of their commitments, the Commission seeks to understand the extent of potential exclusivity agreements, the nature of the influence of Microsoft or Amazon over their partners, the impact of their relationship on competitors and any restrictions on setting business strategies.

The companies are required to file their responses within 45 days, and the order was signed yesterday by FTC Chair Lina Khan. It is the latest in her tussles with big tech, and the chair has previously targeted Facebook parent Meta over the firm’s acquisitions and drawn accusations of “bias” from the company in response.

Sam Altman OpenAI

The FTC’s legal actions under Khan have focused typically on Amazon and Meta. One such action included a lawsuit filed against Amazon last year that accused the firm of improperly relying on its dominant position as a platform to manipulate prices. Its request to the five companies today follows recent announcements by regulators in the U.K. and the European Union that seek to check whether Microsoft’s deal with OpenAI violates competition laws.

One of the most recent technology antitrust losses for the industry came when NVIDIA Corporation’s multi billion dollar bet to acquire British semiconductor designer Arm Ltd fell through. Microsoft, for its part, has remained careful to avoid taking a controlling interest in OpenAI.

Corporate mergers and acquisitions typically see either direct ownership, non controlling interest or majority stakes from firms such as Microsoft in smaller players like OpenAI. However, should any controlling interest prevent a target firm’s market from securing access to its products and unfavorably favor one party, then regulators often refuse to provide clearance.

Describing her latest action, Khan’s statement read:

History shows that new technologies can create new markets and healthy competition. As companies race to develop and monetize AI, we must guard against tactics that foreclose this opportunity. Our study will shed light on whether investments and partnerships pursued by dominant companies risk distorting innovation and undermining fair competition.

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