Big Tech Investments in Generative AI Companies Face Probe by US Federal Trade Commission

In a move aimed at understanding the dynamics of Big Tech’s involvement with generative AI companies, the US Federal Trade Commission (FTC) has issued compulsory orders to five major technology firms, including Microsoft and Google. The orders require these companies to disclose details about recent investments and partnerships involving generative AI entities such as OpenAI and Anthropic.
Generative AI opportunity for channelsAlphabet, the parent company of Google, Amazon, Anthropic, Microsoft, and OpenAI have all received orders from the FTC, signaling an investigation into the corporate alliances formed with AI providers. The primary objective is to gain insights into these relationships and evaluate their potential impact on the competitive landscape.

Notable investments include Google and Amazon’s financial involvement in Anthropic, and Microsoft’s substantial investment of nearly $10 billion in OpenAI, the creator of ChatGPT led by Sam Altman.

FTC Chair Lina Khan emphasized the importance of monitoring AI development, stating, “As companies race to develop and monetize AI, we must guard against tactics that foreclose this opportunity.” She added that the study aims to assess whether investments and partnerships pursued by dominant companies could distort innovation and undermine fair competition.

The FTC’s inquiry will focus on delving into the specifics of investment agreements between the companies, examining how these partnerships influence product releases, and evaluating the oversight rights associated with these collaborations. Additionally, the agency seeks an analysis of the impact of these investments on market share, competition, and potential sales growth in the sector.

Companies targeted by the orders have a 45-day window from the date of receipt to respond comprehensively to the FTC’s inquiries. The commission is keen on understanding the competitive landscape, resource competition for AI product development, and any information shared with other government entities.

A Microsoft spokesperson expressed readiness to cooperate, stating, “We look forward to providing the FTC with the information it needs to complete its study.” Google welcomed the study, asserting that it would “shine a bright light” on companies that engage in practices locking in customers. The investigation underscores the growing regulatory scrutiny over the intersection of Big Tech and emerging AI technologies.

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