FTC takes on Artificial Intelligence Investments from Big Tech

Major technology players such as Microsoft, Amazon, and Google are actively engaging in strategic investments in innovative startups like OpenAI and Anthropic to gain a competitive advantage in the rapidly evolving field of artificial intelligence. However, this approach is now under scrutiny from regulatory bodies, with the Federal Trade Commission (F.T.C.) leading the charge alongside international counterparts. The FTC’s objective is to curb the growing influence of Big Tech, although concerns are mounting regarding the potential consequences for startups’ ability to secure essential funding.

The key issue at stake is whether these deals create anti-competitive conditions. While these transactions don’t involve outright acquisitions, the Microsoft-OpenAI deal has raised eyebrows due to its close ties. Microsoft’s $13 billion investment secures a 49 percent stake, just below the 50 percent threshold to evade antitrust scrutiny, and grants the company access to OpenAI’s intellectual property. Although Microsoft lacks representation on OpenAI’s board, its impact on the startup became evident when it expressed interest in hiring Sam Altman, OpenAI’s ousted CEO.

In contrast, Amazon and Google’s involvement with Anthropic seems less influential, despite jointly committing $6 billion. Notably, Google’s deal with Anthropic avoids exclusive tech rights, distinguishing it from Microsoft’s arrangement with OpenAI. The F.T.C. is seeking additional information on these deals, aiming to uncover their strategic rationale and potential impact on competition. The inquiry mirrors similar investigations by the UK’s Competition and Markets Authority and the European Commission, reflecting a global effort to prevent the consolidation of power among tech giants.