US regulators to launch antitrust investigation against Microsoft, OpenAI & NVIDIA

Antitrust worry doesn’t seem to end for major tech companies including Microsoft, OpenAI, and NVIDIA. The New York Times reported that the DOJ and the FTC have agreed on a deal to probe all three for their dominant roles in the AI industry.

The DOJ and FTC to investigate leading AI companies Microsoft, OpenAI, and NVIDIA

Previously, antitrust regulators have voiced their numerous concerns around AI. This includes big tech companies like Microsoft and OpenAI having access to data to train their AI models, generative AI taking a toll on the creative work industry, and a lot more. 

The recent deal between the DOJ and FTC is similar to what they agreed upon in 2019. The FTC then probed Meta and Amazon, whereas the DOJ sued Apple and Google for alleged antitrust violations. The cases are ongoing as we write, and all the companies have continued to deny any wrongdoing to date. 

Reuters reports that the deal between the two regulators comes after the FTC ordered OpenAI, Microsoft, Alphabet, Amazon, and Anthropic in January. The FTC’s order directs the companies to provide information on recent investments and partnerships involving generative AI companies and cloud service providers. 

The Associated Press recently reported that two anonymous sources have confirmed the details of the recent deals between two regulators. As per the sources, the DOJ will launch an investigation of NVIDIA. Whereas, the FTC will scrutinize Microsoft and OpenAI which are close business partners.

Microsoft is already on the FTC’s radar for its deal with AI startup, Inflection AI

The FTC is also investing in Microsoft’s $650 million unusual deal with Inflection AI as reported by the Wall Street Journal. The deal that Microsoft struck to use Inflection’s AI model also allows it to hire startup’s most of its staff including its co-founders.

The agency launched an investigation as it has concerns that the reached agreement is to evade merger disclosure requirements. 

For the uninitiated, NVIDIA currently dominates the AI chip industry with roughly 80% of the market share. These include custom AI processors developed by cloud computing giants like Microsoft, Google, and Amazon. This monopoly allows NVIDIA to gain gross margins of up to 80%. 

Time will tell how this antitrust investigation against Microsoft, NVIDIA, and OpenAI shapes up, but one thing is certain, antitrust regulators are quite concerned about big tech firms monopolizing the AI market leaving little room for small players.