U.S. antitrust enforcement agencies are preparing an offensive to counter aggressive moves by tech giants to monopolize artificial intelligence (AI) amid growing concerns that a few companies could squelch competition in the rapidly evolving technology.
The Federal Trade Commission and the Justice Department have reached an agreement that sets the stage for antitrust investigations into Microsoft, OpenAI and Nvidia, launching an unprecedented regulatory probe into the companies’ conduct in the AI race, said a person familiar with the matter who spoke on condition of anonymity to discuss the investigations, details of which have not been made public.
The agreement, expected to be finalized within days, ends a long-running stalemate between the two agencies over how oversight of artificial intelligence companies should be shared — a dispute that has limited the federal government’s ability to respond to a rapidly changing corporate environment.
Under the agreement, the Justice Department will investigate the conduct of Nvidia, which has leveraged its dominance in AI chip manufacturing to become the second-largest publicly traded company in the U.S. The FTC will take the lead in investigating the actions of Microsoft and OpenAI, the developer of the popular chatbot ChatGPT.
The FTC also has opened an investigation into whether Microsoft designed its $650 million contract with AI company Inflexion to circumvent government antitrust review, the people said.
As part of the deal, Inforation AI CEO Mustafa Suleiman and many other employees joined the Redmond, Wash., technology company. Federal law requires companies to report mergers worth more than $119 million to federal agencies, and the FTC is investigating whether Microsoft intentionally structured the deal to avoid such scrutiny.
“Our agreement with Inflection provides us with the opportunity to hire talent at Inflection AI and build a team that can accelerate Microsoft Copilot,” Microsoft spokesperson Becca Dougherty said in a statement. “We take our legal transaction reporting obligations under the HSR Act seriously and are confident that we are in compliance with those obligations.”
Nvidia and OpenAI declined to comment.
The Justice Department and FTC agreement was first reported by The New York Times, and the FTC’s investigation of Inflection was first reported by The Wall Street Journal.
