FTC dives deep into tech giants' AI pool party

The Federal Trade Commission initiates an investigation into AI partnerships and investments by large tech companies, focusing on their competitive impact and strategic implications.

The Federal Trade Commission (FTC) says it will investigate significant artificial intelligence (AI) players like Amazon, Alphabet, Microsoft, Anthropic, and OpenAI about their investments and partnerships.

The FTC announced on Jan 25 that it had issued orders to the five companies requiring them to provide information regarding agreements with generative AI companies and major cloud service providers, and the strategic reasoning behind them.

The FTC sent the orders to companies involved in multibillion-dollar investments — Microsoft and OpenAI, Amazon and Anthropic, and Google and Anthropic.

FTC issues 6(b) orders regarding recent investments and partnerships involving generative #AI and major cloud service providers: https://t.co/rFtvH9pJS9 #GenAI /1

— FTC (@FTC) January 25, 2024

During a tech summit organized by the agency, Lina Khan, FTC Chair, said the issued orders are a “market inquiry into the investments and partnerships being formed between AI developers and major cloud service providers.”

Businesses are employing various approaches to developing and using AI, which involves forming partnerships and directly investing in AI developers to gain access to technologies and inputs essential for AI development.

The regulator will use its power to conduct a 6(b) study, permitting it to investigate AI companies independently of its law enforcement division and issue civil investigative demands. This means the agency can compel companies to submit particular reports and provide responses to inquiries about their operations.

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The FTC wants details related to the impact of such partnerships on competition for AI inputs and resources, including competitive dynamics related to essential products and services required for generative AI.

The commission is also interested in accessing information shared with any other government entity, including foreign government entities, regarding investigations, requests for information, or other inquiries related to these topics.

The UK’s antitrust authority is also considering starting an inquiry into Microsoft’s significant collaboration with OpenAI. Microsoft responded, stating it has a non-voting observer role on the ChatGPT maker’s board.

The European Commission has also signaled its intent to investigate whether Microsoft’s investment in OpenAI might be reviewable under the EU Merger Regulation.