AI

The FTC wants to know more about Big Tech’s AI partnerships

The Commission is looking into companies like OpenAI, Microsoft, and Amazon.
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The Federal Trade Commission announced that it will probe partnerships between tech giants and buzzy generative AI startups as the government looks to curb companies from consolidating control over the budding technology.

The agency said it was asking five companies for information about their investments and partnerships in the generative AI and cloud services spaces: Alphabet, Amazon, Anthropic, Microsoft, and OpenAI.

The information will help regulators study the impact these relationships have on the industry’s competitive landscape and make sure they aren’t breaking laws designed to prevent companies from coordinating control over markets, the FTC said.

“Our study will shed light on whether investments and partnerships pursued by dominant companies risk distorting innovation and undermining fair competition,” FTC Chair Lina Khan said in a statement.

Why these companies: The FTC specifically targeted companies at the center of mega-investments and partnerships that could be seen as skirting legal reviews mandated for traditional mergers and acquisitions.

Microsoft has reportedly pledged to sink $13 billion into OpenAI, while Amazon and Alphabet have committed $4 billion and $2 billion, respectively, toward OpenAI’s startup rival Anthropic.

What are the grounds for the probe? The FTC is acting under Section 6(b) of the FTC Act, which allows the agency to gather info without a “specific law enforcement purpose.” The findings may be used to inform future actions, like if the FTC were to decide to take one or more of these companies to court. The commission voted 3–0 to issue the orders.

What’s driving the move: Khan, who was a noted critic of Big Tech’s power before joining the Biden administration, has taken a firmer stance toward Silicon Valley giants—and antitrust enforcement more broadly—than the FTC had taken in recent decades.

But the FTC isn’t the only antitrust enforcer with an eye on this issue: EU officials have also signaled that Microsoft’s investments in OpenAI might be subject to merger review, and UK competition authorities issued a similar caution in December.

It’s also part of a wider effort on the part of governments all over the world to understand and rein in the downsides of the fast-growing technology.

What happens next: The five companies now have 45 days to respond with the requested information.

Keep up with the innovative tech transforming business

Tech Brew keeps business leaders up-to-date on the latest innovations, automation advances, policy shifts, and more, so they can make informed decisions about tech.