The FTC has started an inquiry on the multi-billion dollar investments that Microsoft, Amazon, and Google have made in the AI startups OpenAI and Anthropic. These investments have allowed the big companies to form deep ties with their smaller rivals, making them able to dodge most government scrutiny. Traditionally, regulators have focused on antitrust lawsuits against deals where the tech giants are buying rivals outright or using acquisitions to expand, leading to increased prices and other harm. However, the FTC’s inquiry will examine how these investment deals alter the competitive landscape. Lina Khan, the FTC chair, stated that the inquiry would shed light on whether these investments and partnerships pursued by dominant companies could risk distorting innovation and undermining fair competition.
The inquiry is the first major effort by the agency to understand how companies use partnerships and investments to rapidly expand their influence in AI. Other regulators internationally are also examining the tech companies’ investments in AI startups. Additionally, the FTC would ask Microsoft, Amazon, Alphabet, OpenAI, and Anthropic for details and whether the deals involved rights to board seats. Microsoft has invested $13 billion in OpenAI for effectively a 50 percent stake, while Amazon and Google have also made large commitments in Anthropic.
The study could be followed by a more formal investigation into whether the deals between the companies violate antitrust laws. The F.T.C. last year opened an investigation into whether ChatGPT has harmed consumers, with a focus more broadly on whether the technology can be used to commit fraud. Reflecting on the importance of fostering fair and open competition, Ms. Khan said, “We once again find ourselves at a key decision point.”
