FTC Probes Big Tech's Influence on AI Startups Amidst Growing Antitrust Concerns

The U.S. Federal Trade Commission (FTC) has launched an investigation into the deepening relationships between major tech firms like Amazon, Google, and Microsoft and leading artificial intelligence startups, including OpenAI, the creator of ChatGPT. This inquiry aims to scrutinize whether these ties could potentially undermine fair competition in the rapidly evolving AI industry.

FTC Chair Lina Khan announced the investigation at an AI forum, noting concerns about dominant firms exerting undue influence or gaining privileged access through investments and partnerships with AI developers. The probe will particularly focus on the generative AI boom, which has seen a surge in demand for tools like chatbots and novel AI-driven imagery and sound production.

The FTC has issued compulsory orders to five companies, including Amazon, Google, Microsoft, Anthropic, and OpenAI, to provide information about their agreements and related decision-making processes. This action follows the recent multimillion-dollar deals between Google and Amazon with Anthropic, and Microsoft's longstanding relationship with OpenAI.

Google, in a statement, welcomed the FTC inquiry, subtly alluding to Microsoft's history with antitrust issues. Microsoft’s Rimy Alaily expressed readiness to cooperate, defending such partnerships as beneficial for competition and innovation. Meanwhile, Amazon, Anthropic, and OpenAI declined to comment.

The inquiry comes amidst growing global scrutiny, with the European Union and the United Kingdom already examining Microsoft's investments in OpenAI. Antitrust advocates have criticized these deals as quasi-mergers, with the FTC's move being welcomed as a necessary step to prevent market consolidation.

Matt Stoller of the American Economic Liberties Project highlighted concerns over Big Tech firms finding ways to exert influence without formal acquisitions. Microsoft's undisclosed total investment in OpenAI and its complex governance structure, particularly after the temporary ouster of CEO Sam Altman, have raised additional questions.

The FTC's investigation, unanimous among its commissioners, aims to illuminate the competitive dynamics in AI development. The companies involved have 45 days to respond to the FTC's queries, which include partnership agreements, product release decisions, and resources for building AI systems. This inquiry marks a critical moment in addressing the concentration of power in AI and its implications for market competition and innovation.