President Joe Biden’s Federal Trade Commission (FTC) is launching a probe into Big Tech’s huge investments into artificial intelligence (AI) start-ups.
The FTC intends to look into Amazon, Google and Microsoft’s multibillion dollar investments into and partnerships with OpenAI and Anthropic, mandating all five firms turn over related information within 45 days, according to a Thursday agency press release. Regulators have usually taken antitrust actions against acquisitions that have caused higher prices and other negative impacts rather than these types of partnerships and investments, according to The New York Times. (RELATED: Org That Defunds Conservatives Tries To Sic Biden FTC On Elon Musk’s X)
This is the first significant FTC move to examine these developments in the AI industry, according to the NYT.
“History shows that new technologies can create new markets and healthy competition. As companies race to develop and monetize AI, we must guard against tactics that foreclose this opportunity,” FTC Chair Lina Khan stated in the press release. “Our study will shed light on whether investments and partnerships pursued by dominant companies risk distorting innovation and undermining fair competition.”
“We hope the FTC’s study will shine a bright light on companies that don’t offer the openness of Google Cloud or have a long history of locking-in customers – and who are bringing that same approach to AI services,” a Google spokesperson told the Daily Caller News Foundation.
FTC issues 6(b) orders regarding recent investments and partnerships involving generative #AI and major cloud service providers: https://t.co/rFtvH9pJS9 #GenAI /1
— FTC (@FTC) January 25, 2024
The probe strives to obtain information about how the deals relate to product choices, “governance or oversight rights, and the topic of regular meetings,” according to the release. It also intends to understand how the deals affect competition in the AI industry and look for what information the companies have given to domestic and international government bodies.
“At the FTC, the rapid development and deployment of AI is informing our work across the agency,” Khan said Thursday, according to CNBC. “There’s no AI exemption from the laws on the books, and we’re looking closely at the ways companies may be using their power to thwart competition or trick the public.”
“The U.S. has assumed a global AI leadership position because important American companies are working together,” Rima Alaily, corporate vice president, competition and market regulation group at Microsoft, told the DCNF. “Partnerships between independent companies like Microsoft and OpenAI, as well as among many others, are promoting competition and accelerating innovation. We look forward to providing the FTC with the information it needs to complete its study.”
James Czerniawski, senior policy analyst at Americans for Prosperity, told the DCNF that the effort is “misguided” and a “classic overreach that threatens to stifle innovation rather than foster it.”
“In chasing headlines, the FTC risks impeding future progress and discouraging collaboration in a critical field that will drive America’s technological and economic future,” he said.
OpenAI did not immediately respond to the DCNF’s request for comment. Anthropic and Amazon declined to comment, and the FTC pointed DCNF to its ongoing tech summit.
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