The U.S. Federal Trade Commission (FTC) is reported to be concerned about antitrust law violations regarding the partnership between Microsoft (MS) and ChatGPT developer OpenAI.
On the 18th (local time), according to Bloomberg News and others, the FTC raised concerns in a report released the previous day that MS's $13 billion investment in OpenAI could extend its dominance in cloud computing to the emerging artificial intelligence (AI) market.
MS, the second-largest player in the cloud computing market, has partnered with OpenAI since 2019 and invested $13 billion. This could limit competition as MS expands its dominance in the AI market.
The FTC also pointed out that MS's investment in OpenAI increases the risk that AI developers could be 'completely' acquired by MS in the future. It added that the investments by Amazon and Google in Anthropic, regarded as a competitor to OpenAI, also heighten this risk. Amazon and Google have invested $8 billion and $2 billion in Anthropic, respectively.
Since ChatGPT sparked the generative AI craze two years ago, major AI startups have depended on large technology corporations for support in developing costly and compute-intensive technologies. However, the FTC noted that these corporations are requiring some of the funds invested in such startups to be used for their own products and services. It raised concerns that these partnerships concentrate valuable AI talent within corporations, increase the likelihood of monopolistic control over chip development, model training, and data acquisition by large corporations.
FTC Chair Lina Khan stated in a statement, 'The FTC report highlights how partnerships among large technology corporations can create a lock-in effect, causing startups to lose access to essential AI resources and exposing sensitive information, which undermines fair competition.'
The report raised concerns that one of the large technology corporations had access to confidential financial performance information during a transaction with an AI startup, and in another contract, the corporation was allowed to access the model output results, which are core assets of the AI startup.
The FTC has been investigating these large corporations' investments in AI startups over the past year, and the findings from this investigation may be used to inform future actions.