The Federal Trade Commission and the Justice Department came together to launch an investigation against OpenAI, Microsoft, and Nvidia to ensure that they don’t have too much influence in the AI industry.
Microsoft and OpenAI will be investigated by the FTC whereas Nvidia will be investigated by the Department of Justice.
The investigation will only concern how these companies operate and not how many mergers or acquisitions they have made.
Microsoft, OpenAI, and Nvidia – the three tech giants that have been making significant moves in the AI industry have come under the radar of the Federal Trade Commission and the Justice Department, which are now planning to launch an antitrust investigation against them.
The agreement for a joint collaboration for this investigation was struck between the two agencies just last week and is expected to be executed soon in the coming days.
Speaking of the investigation, it will focus on how much influence each company has on the AI industry – in terms of their business practices and not their acquisitions or mergers.
This isn’t the first time these companies have come under the radar of regulators.
For example, in July last year, the FTC was investigating whether OpenAI was taking unfair advantage of customers through its data collection practices.
Then again in January, a broader investigation was launched on the relationship between tech giants and AI companies such as Microsoft’s investment in OpenAI and Google and Amazon’s investment in Anthropic.
Why Are These Companies Suddenly Being Investigated?
To understand why these companies are being investigated, it’s important to understand what antitrust laws are. In simple terms, antitrust laws are regulations that ensure that no particular company has too much influence (monopoly) in an industry and that there’s healthy competition in the market.
Now, while it may be a stretch to call OpenAI and Microsoft monopolies right now, there’s no doubt that they are one of the top leaders in AI.
Also, OpenAI’s model is being used to power Microsoft Copilot+, which in turn will be used by various laptop makers such as Dell, HP, Lenovo, Samsung, and so on.
Basically, most well-known laptop brands will now be powered by Microsoft and OpenAI. This is how a company slowly turns into a monopoly and this is exactly what the FTC is trying to prevent.
Nvidia is also not far behind. Meta, which is currently working on its own AI model called Llama, has been investing billions in Nvidia chips. As a result of this, the chip maker’s revenue shot up by more than 250%. If things continue at this pace, other smaller chipmakers won’t stand a chance against it.
This news comes at the heels of the latest controversy in OpenAI.
Several top executives left the company stating that the company has digressed from its original goal and is now focusing more on profit than sustainable development.
Plus, just recently, 13 people who were formerly employed with popular AI firms like OpenAI and DeepMind signed an open letter, calling for these companies to be more transparent about their practices and their long-term impacts on society.
Apparently, the financial incentive is so huge that the companies might be tempted to ignore the risks associated with such rapid development of AI.
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