The Federal Trade Commission (FTC) has raised antitrust concerns regarding tech giant Microsoft’s $13.75bn investment in OpenAI.
In a report, the commission suggested that the investment may extend Microsoft’s dominance in cloud computing into the emerging AI market.
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The report highlighted several potential competition concerns, including: the partnerships’ impact on access to key inputs such as computing resources and engineering talent; the potential increase in switching costs for AI developer partners.
The report also indicated the possibility that cloud service providers’ partners gain access to sensitive technical and business information not accessible to others.
In January 2024, the FTC initiated an investigation into the collaborations between major Big Tech cloud providers and generative AI companies, such as Google, Amazon, Microsoft, OpenAI, and Anthropic.
These orders were directed to five companies involved in three separate multi-billion-dollar investments: Microsoft and OpenAI, Amazon and Anthropic, and Alphabet and Anthropic.
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By GlobalDataFTC chair Lina Khan said: “As companies rapidly deploy generative AI technologies, enforcers and policymakers must stay vigilant to guard against business strategies that undermine open markets, opportunity, and innovation.
“The FTC’s report sheds light on how partnerships by big tech firms can create lock-in, deprive start-ups of key AI inputs, and reveal sensitive information that can undermine fair competition.”
The FTC noted that one tech company received access to confidential financial performance information from an AI startup, including weekly revenue trends and customer updates.
Additionally, some agreements allow tech companies to access AI model outputs, referred to as “synthetic data,” for training their own AI models.
The news publication quoted Microsoft deputy general counsel Rima Alaily as saying: “The partnership between Microsoft and OpenAI has enabled one of the most successful AI startups in the world and spurred a wave of unprecedented technology investment and innovation in the industry, creating thousands of new startups in the US and around the world.”
The report suggests that these partnerships could result in tech companies holding exclusivity rights to AI tools, discouraging AI companies from collaborating with multiple tech firms.
