Microsoft, OpenAI, and Nvidia are now under increased scrutiny for their role in the artificial-intelligence industry. US regulators have reportedly agreed to investigate the companies.
New York Times reports that the US Department of Justice and Federal Trade Commission have reached an agreement on the investigation of the major players in the AI industry. The agreement is expected to be finalized in the next few days.
The NYT reported on Wednesday that the DoJ would lead the investigation into whether Nvidia, a leading manufacturer of chips used to train and operate AI, had violated antitrust laws, which oversee fair competition and prevent monopolies.
The FTC is also going to scrutinise OpenAI – the company that created the chatbot – and Microsoft – OpenAI’s largest investor, as well as a significant financial supporter of other AI firms.
The Wall Street Journal also reported Thursday, that the FTC was investigating whether Microsoft structured its recent deal with Inflection AI in order to avoid an antitrust investigation.
Microsoft in March hired Inflection CEO and cofounder Mustafa Suleyman as the head of its new AI division. Microsoft also agreed to pay $650m to his company (£508m), to license their AI software.
The FTC already showed interest in the AI industry. It demanded in January that OpenAI, Microsoft and Google’s Alphabet owned by Alphabet, Amazon and startup Anthropic provide information about recent investments and partnerships between generative AI companies, cloud service providers and cloud owners.
It launched an investigation last year OpenAI, based on allegations that it violated consumer protection laws and put personal data and reputations at risk.
Jonathan Kanter, the head of DoJ’s Antitrust Division, told The Financial Times Thursday that his organisation would “urgently” examine the AI sector, and “monopoly chokepoints and the competitive landscape”.
Kanter says that regulators need to act fast in order to prevent powerful tech companies from controlling the market.
Nvidia’s valuation surpassed $3tn for the first ever time on Wednesday . Apple was a distant second.
Rebecca Haw Allensworth is a professor of Vanderbilt Law School. She said that the reported collaboration between DoJ and FTC was a reflection of a relationship which has become more collaborative under Biden’s administration.
She said that, “it used to be the case that agencies would divide cases by industry. But now, with this market so important and large, they share responsibility and work hand-in-hand.” There is no doubt in the minds of the agencies that AI represents the next frontier for anticompetitive behavior by companies already suspected of avoiding or suppressing competition.
Microsoft stated that it was “confident’ it had adhered to antitrust obligations in relation to the Inflection Agreement. The FTC and DoJ declined to comment. OpenAI, Nvidia, and the FTC all declined to make any comments.
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