Feds Launch Inquiry Into OpenAI and Microsoft’s Messy Relationship

The Federal Trade Commission (FTC) launched an inquiry into the billion-dollar AI deals of OpenAI, Microsoft, Alphabet, Amazon, and Anthropic on Thursday. Throughout the inquiry, cloud providers must disclose details about the nature of their partnerships and investments with AI startups. Of particular interest is the partnership behind ChatGPT, OpenAI, and Microsoft, in which Microsoft CEO Satya Nadella hired Sam Altman and offered jobs to his 700-person staff after the OpeanAI CEO was fired in November.

“History shows that new technologies can create new markets and healthy competition,” said FTC Chair Lina Khan in a statement Thursday. “As companies race to develop and monetize AI, we must guard against tactics that foreclose this opportunity.”

Three specific multi-billion dollar partnerships are under the antitrust regulator’s microscope here: Microsoft and OpenAI, Amazon and Anthropic, and Google and Anthropic. It was previously reported that the Department of Justice and FTC were discussing who could investigate OpenAI and Microsoft’s partnership, and it looks like the FTC won. As for Anthropic, both Amazon and Google have multi-billion dollar partnerships with Dario Amodei’s AI startup, and his corporation will face scrutiny for both ventures. OpenAI and Anthropic build the world’s most advanced large language models, and their exclusive deals with cloud giants like Google, Amazon, and Microsoft are now being called into question.

Amazon and Anthropic declined to comment on the matter. Alphabet, Microsoft, and OpenAI did not immediately respond to Gizmodo’s request for comment.

These partnerships have allowed Google, Amazon, and Microsoft to have great influence over these AI startups without buying them outright, and the nature of the deals will be under inspection. The inquiry will look into how these partnerships influence the operations of AI startups, and what the strategic rationale behind each investment is. This is the first step from the FTC in formally looking into these companies and will be used to help determine if any further action is needed.

The United Kingdom’s Competition and Markets Authority started officially looking into Microsoft and OpenAI’s relationship in December. The UK regulator mentioned recent changes to OpenAI’s governance as a factor in its decision to investigate.

The companies have 45 days to respond to the FTC’s order.

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