US regulators investigate AI firms for antitrust law violations on competition.
Microsoft, OpenAI, and Nvidia are facing increased antitrust scrutiny in the AI industry after US regulators reportedly agreed to investigate the companies.
The US Department of Justice (DoJ) and the Federal Trade Commission (FTC) have reached a deal on these investigations, the New York Times reported, with the agreement expected to be finalized soon.
The DoJ will lead the investigation into Nvidia, the leading chipmaker for AI systems, for potential antitrust law violations regarding fair competition and monopolies, according to the NYT.
Meanwhile, the FTC will scrutinize OpenAI, the company behind the ChatGPT chatbot, and Microsoft, OpenAI’s largest investor and a significant backer of other AI firms.
The Wall Street Journal reported on Thursday that the FTC is investigating whether Microsoft structured a deal with startup Inflection AI to avoid antitrust scrutiny.
In March, Microsoft hired Inflection’s CEO and co-founder, UK entrepreneur Mustafa Suleyman, to lead a new AI division and agreed to pay his company $650 million (£508 million) to license its AI software.
The FTC has shown interest in the AI market. In January, it ordered OpenAI, Microsoft, Alphabet (Google’s parent company), Amazon, and startup Anthropic to provide information on recent investments and partnerships in generative AI and cloud services.
Last year, it opened an investigation into OpenAI for potentially violating consumer protection laws by risking personal reputations and data.
Jonathan Kanter, head of the DoJ’s antitrust division, told the Financial Times on Thursday that the organization would urgently examine the AI sector, focusing on “monopoly choke points and the competitive landscape” in technology.
Kanter emphasized the need for quick regulatory action to prevent powerful tech companies from dominating the market.
Rebecca Haw Allensworth, a professor at Vanderbilt Law School, noted that the reported collaboration between the DoJ and FTC reflects a more cooperative relationship under the Biden administration.
“Previously, the agencies divided cases by industry, but with this market being so significant for antitrust enforcement, they are now sharing responsibility and working closely together,” she said. “There is no doubt that the agencies view AI as the next frontier for anticompetitive behavior by firms already seen as avoiding and suppressing competition.”
