The Federal Trade Commission is investigating a recent deal between Microsoft and AI startup Inflection, as part of increasing scrutiny on major AI players like Microsoft, Google, Nvidia, and OpenAI by US antitrust regulators.
US Antitrust Agencies Investigate Microsoft and AI Industry
Washington, D.C. – The Federal Trade Commission (FTC) has initiated an investigation into a recent deal between Microsoft and artificial intelligence (AI) startup Inflection, as confirmed by sources familiar with the situation. This move comes amidst increasing scrutiny by U.S. antitrust regulators on the burgeoning AI industry, with both the FTC and the Department of Justice (DOJ) preparing to oversee major entities such as Microsoft, Google, Nvidia, and OpenAI.
The agreement, expected to be finalized soon, designates the DOJ as the lead investigator for Nvidia and allocates Microsoft and OpenAI investigations to the FTC. The focus will be on whether these companies have engaged in anti-competitive behavior through their dominant market positions in AI.
The FTC’s probe into Microsoft centers on whether its investment in Inflection should have been reported as an acquisition. In March, Microsoft announced it had employed Inflection’s co-founders and several staff members to head its Copilot program, with Inflection’s AI model hosted on Microsoft’s cloud platform. Reports suggest Microsoft paid around $650 million as part of this arrangement.
Responses from Microsoft, Inflection, Google, Nvidia, and OpenAI have not been received. Both the DOJ and FTC have also declined to comment on these developments.
This joint oversight by U.S. agencies marks a significant regulatory step as concerns mount over potential abuses by tech giants leveraging AI technologies. Industry leaders, critics, and regulators alike have highlighted the need for stringent oversight to prevent monopolistic practices and ensure fair competition.
Nvidia, currently a leading supplier of computing chips essential for advanced AI models, recently became the second-largest publicly traded company in the United States, highlighting the intense focus on AI investments.
Historically, major tech companies like Amazon, Apple, Google, Meta, and Microsoft have faced U.S. government antitrust suits. There is growing apprehension that these firms might extend their dominance into AI, a sector invigorated by the rapid rise of technologies like OpenAI’s ChatGPT.
FTC Chair Lina Khan and the DOJ’s antitrust chief Jonathan Kanter have both emphasized the potential risks and abuses in the AI sector. They assert the importance of vigilant regulatory frameworks to prevent the misuse of AI for monopolistic control and unethical practices.
The detailed agreement and continuing investigations underscore the federal government’s strategic pivot to closely monitor and regulate the AI industry’s evolution.
Updated: Contextual and development information provided.
