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FTC investigating Microsoft, Amazon, and Google’s AI investments

  • The United States Federal Trade Commission (FTC) is formally investigating three big tech firms and their AI investments – Microsoft, Amazon, and Google.
  • It is specifically looking at investments made into startups OpenAI and Anthropic.
  • The FTC has given all three firms 45 days to respond with feedback to their queries.

Technology often moves at a rate of knots that regulators simply cannot keep pace with. Case in point the Federal Trade Commission (FTC) in the United States, which is only now looking to investigate the AI investments made by big tech firms into smaller startups.

More specifically the FTC is probing the AI investments made by Microsoft, Amazon, and Google as it relates to startups OpenAI and Anthropic.

Microsoft famously invested an estimated $10 billion in OpenAI during the early part of 2023 as its ChatGPT platform became wildly popular and remains the standard as far as generative AI for public consumption is concerned.

Amazon too hitched its wagon to Anthropic, investing $4 billion in the startup and taking a minority ownership in the company as it embedded many of its AI tools within the AWS ecosystem.

It is worth pointing out that the investigation from the FTC is compulsory, with the three big tech firms being given 45 days in order to respond to the several queries that the watchdog has around their respective AI investments.

“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,” outlined FTC chair Lina Khan.

The FTC noted that it is specifically looking for feedback on the following:

  • “Information regarding a specific investment or partnership, including agreements and the strategic rationale of an investment/partnership.
  • The practical implications of a specific partnership or investment, including decisions around new product releases, governance or oversight rights, and the topic of regular meetings.
  • Analysis of the transactions’ competitive impact, including information related to market share, competition, competitors, markets, potential for sales growth, or expansion into product or geographic markets.
  • Competition for AI inputs and resources, including the competitive dynamics regarding key products and services needed for generative AI.  
  • Information provided to any other government entity, including foreign government entities, in connection with any investigation, request for information, or other inquiry related to these topics.”

It will be interesting to see what the investigation yields, as well as whether anything will be done should improprieties be discovered.

Also of note is that the FTC is not the only watchdog looking at these recent AI investments, with the UK’s Competition and Markets (CMA) investigating Microsoft in particular, although the findings from said investigation are yet to be shared.

[Image – Photo by Igor Omilaev on Unsplash]

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