The FTC Investigates Investments and Partnerships in the Generative AI Sector
The FTC Investigates Investments and Partnerships in the Generative AI Sector: The Federal Trade Commission (FTC) has announced that it is seeking information regarding recent investments and partnerships involving companies in the generative AI sector and major cloud service providers. The entities subject to these inquiries include Alphabet (the parent company of Google), Amazon, Microsoft, as well as OpenAI and Anthropic, two leaders in the generative AI field.
In recent months, numerous companies have formed partnerships with generative AI startups, with Google, Amazon, and Microsoft among them. The success of ChatGPT prompted Microsoft to make significant investments in OpenAI, with whom they collaborated. Additionally, Anthropic received substantial investments from Google and Amazon, with whom it also established partnerships.
The Federal Trade Commission, aiming to foster competition and protect American consumers, is leveraging Article 6(b) of the FTC Act, which empowers it to conduct studies to gain a deeper understanding of market trends and business practices. The objective is to scrutinize these partnerships and investments to comprehend their impact on the competitive landscape.
Lina M. Khan, Chair of the FTC, a long-time advocate against the GAFAM monopoly, stated, "History shows that new technologies can create new markets and healthy competition. As companies strive to develop and monetize AI, we must guard against tactics that exclude this opportunity. Our study will determine whether investments and partnerships pursued by dominant companies pose a risk of distorting innovation and undermining fair competition."
Alphabet, Amazon, Microsoft, OpenAI, and Anthropic have 45 days from the receipt of the order to respond.
According to FTC Commissioner Rebecca Kelly Slaughter, the transactions of these five companies may have been structured to circumvent merger laws. Microsoft is currently under FTC investigation regarding the acquisition of Activision Blizzard, the developer of popular video games such as "Call of Duty" and "World of Warcraft." If the acquisition is finalized, Microsoft could face further scrutiny from the FTC, as Senator Elizabeth Warren has called on the Commission to annul the merger due to widespread layoffs at Activision Blizzard.