FTC Launches Study on Big Tech Deals with OpenAI, Anthropic

The US Federal Trade Commission (FTC) on Thursday launched a study on Amazon.com Inc., Microsoft Corp., and Alphabet Inc.’s partnerships and dealings with artificial intelligence (AI) developers OpenAI Inc. and Anthropic PBC.

The antitrust agency stated that it has instructed the five Big Tech players to submit information on their recent investments and collaborations involving generative AI and cloud services.

The FTC has also requested details on exclusivity agreements and provided the companies with a 45-day deadline to respond to the order.

Through the inquiry, the FTC would be able to review the fundamentals of deals between Microsoft, Amazon, and Google LLC and AI companies, providing the agency with insight into how such transactions impact competition.

The FTC’s study primarily seeks details on over $19 billion in investments by the three aforementioned Silicon Valley tech giants in a series of agreements that allowed their cloud businesses to join forces with major AI software makers.

The information request is looking into how these tie-ups affect strategy and decisions around product and service pricing, access to offerings, and employees.

Global Antitrust Watchdogs Wary of Big Tech’s AI Investments

The FTC’s latest move comes as antitrust watchdogs across the globe worried over promising AI startups becoming more reliant on the old guard of Big Tech firms to fund their ventures and fulfill their infrastructure needs.

Tech titans have invested significantly in nimble AI software providers to obtain a share in the thriving sector. Such massive backing, done with cash or sometimes cloud credits, has baffled the venture and startup community.

Redmond, Washington-based Microsoft over 2023 has refocused almost all its products around OpenAI’s AI technology. Google, meanwhile, intends to integrate its large language model (LLM) Gemini this year into its search tool, which is currently being tested.

Corporate investors like Amazon and Microsoft have become frontrunners in AI financing, representing 90% of GenAI private fundraising in the past year, around a 40% rise in the previous years.

However, the ability of generative AI, such as ChatGPT, to use data to produce new content had lawmakers and regulators worldwide concerned over their potential to be weaponized, posing a threat to national security, or being utilized for fraudulent activities.

OpenAI and Anthropic build AI trained on a considerable amount of data. The massive investments in the two AI developers have represented more than 10% of the overall US venture funding in startups in 2023.

The San Francisco, California-based firm has struck deals to raise $4 billion from Amazon and over $2 billion from Alphabet.

User Review
0 (0 votes)


Leave a Reply