OpenAI CEO Sam Altman (left) talks with Microsoft CTO and Executive Vice President of AI Kevin Scott during the Microsoft Build conference at Microsoft headquarters in Redmond, Washington, on May 21, 2024.
Jason Redmond | AFP | Getty Images
The Federal Trade Commission and the Department of Justice are scheduled to open antitrust investigations Microsoftand OpenAI Nvidiastudies the influence of powerful companies on the artificial intelligence industry, a knowledgeable source confirmed to CNBC.
The FTC will take the lead in looking into Microsoft and OpenAI, while the Justice Department will focus on Nvidia, and investigations will focus on corporate conduct, rather than mergers and acquisitions, according to the source.
The New York Times first reported on the investigation.
As startups like OpenAI and Anthropic — the companies behind ChatGPT and Claude chatbots — gain traction in the generative AI market, tech giants like Google, Microsoft, Amazon, and Meta are becoming part of an AI arms race of sorts, as they race to integrate the technology. To ensure they are not left behind in a market expected to reach $1 trillion in revenue within a decade.
For example, Microsoft first invested $1 billion in OpenAI in 2019. The size of its investment has since swelled to about $13 billion. Microsoft makes heavy use of the OpenAI model in its Copilot chatbot and offers open source models on its Azure cloud.
Huge investments are necessary because building and training AI models is expensive, requiring thousands of specialized chips that have so far largely come from Nvidia. deadNvidia, which is developing its own model called Llama, said it is spending billions on Nvidia's graphics processing units, one of several that helped the chipmaker boost its year-over-year revenue by more than 250%.
News of the upcoming antitrust investigation comes days after a group of current and former OpenAI employees published an open letter on Tuesday, describing concerns about the AI industry's rapid progress despite a lack of oversight and the absence of whistleblower protections for those who wish to speak out.
“AI companies have strong financial incentives to avoid effective oversight, and we do not believe that dedicated corporate governance structures are sufficient to change this,” the employees wrote, adding that companies “currently have only weak obligations to share some of this information with” governments, and none of it with society. “We do not believe that they can all be relied upon to share it voluntarily.”
This news also comes on the heels of the FTC's decision in January to conduct an expanded study of heavyweights in the AI industry, including Amazon, the alphabetMicrosoft, Anthropic, and OpenAI.
FTC Chairwoman Lena Khan announced the investigation in January during the agency's AI Tech Summit, calling it a “market-based investigation into the investments and partnerships being formed between AI developers and major cloud providers.”
By using its authority to conduct a so-called 6(b) study — named after Section 6(b) of the Federal Trade Commission Act — the regulator can look at AI companies separately from its law enforcement arm and file civil investigative demands. For example, the agency could require companies to submit specific reports and answer questions in writing about their business.
“At the FTC, the rapid development and rapid deployment of artificial intelligence is guiding our work across the agency,” Khan said at the time. “There is no exception for AI from the laws on the books, and we are looking closely at the ways companies may use its power to thwart competition or deceive the public.”
Microsoft and OpenAI did not immediately respond to requests for comment. A Nvidia spokesman declined to comment.
— CNBC's Eamonn Javers contributed to this report.
