The US DoJ will investigate if NVIDIA violated antitrust laws designed to ensure fair competition and prevent monopolies. The FTC will investigate Microsoft and OpenAI for similar violations. FTC is also probing Microsoft for a recent deal with AI startup Inflection AI
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Microsoft, OpenAI, and NVIDIA are set to face massive antitrust scrutiny from US regulators amid concerns over their dominant roles in AI.
The US Department of Justice and the Federal Trade Commission have reportedly reached an agreement to investigate the key players in the AI industry, according to a report by the New York Times.
The agreement between the government agencies, which is expected to be finalised in the coming days, outlines the division of investigative responsibilities between the two regulatory bodies.
While the DoJ will focus on NVIDIA, the leading manufacturer of chips that train and operate AI systems, the FTC will examine OpenAI, the company behind the widely-used ChatGPT chatbot, and Microsoft. The DoJ will investigate whether NVIDIA as a company has violated antitrust laws designed to ensure fair competition and prevent monopolies.
The FTC on the other hand will see if OpenAI and its largest investor Microsoft did something similar.
Further complicating matters for Microsoft, the Wall Street Journal reported that the FTC is probing whether the tech giant structured a recent deal with AI startup Inflection AI just so that it could sidestep any potential antitrust review because of its relations with OpenAI. In March, Microsoft hired Inflection’s CEO and co-founder, Mustafa Suleyman, to head a new AI division and agreed to pay $650 million to license Inflection’s AI software.
The FTC has already showcased a keen interest in the AI market. In January, it requested information from several tech giants, including OpenAI, Microsoft, Google owner Alphabet, Amazon, and startup Anthropic, about their investments and partnerships with generative AI companies and cloud service providers.
Additionally, the FTC launched an investigation into OpenAI last year over allegations that it had violated consumer protection laws by compromising personal data.
Jonathan Kanter, head of the DoJ’s antitrust division, expressed the agency’s commitment to addressing potential monopolistic practices in the AI sector. Speaking to the Financial Times, Kanter emphasized the urgency of examining the AI landscape for “monopoly choke points” and ensuring that no single company dominates the market.
In response to the investigation, Microsoft stated that it is confident and will be complying with all the obligations that the antitrust investigation regarding the Inflection AI agreement will bring with it.
As the AI industry continues to expand rapidly, the increased scrutiny from regulators shows the need for vigilant oversight to ensure competitive practices and prevent the formation of monopolies, something that we have seen too often happen in American tech companies.
The collaborative efforts between the DoJ and FTC signal a robust regulatory approach so as to keep the AI market open and competitive. This will be crucial in fostering innovation while safeguarding consumer interests in an industry poised to revolutionize various aspects of society. Naturally, then, the outcomes of these investigations could have significant implications for the future of AI development and the broader technology landscape.