The Federal Trade Commission (FTC) opened an inquiry into the investments of Big Tech companies that provide cloud services to smaller AI companies like OpenAI and Anthropic.
The FTC sent letters to Alphabet, Amazon, Anthropic, Microsoft, and OpenAI, requiring the companies to explain the impact these investments have on the competitive landscape of generative AI. The commission wants to “scrutinize corporate partnerships and investments with AI providers to build a better internal understanding of these relationships and their impact on the competitive landscape.”
Google and Amazon invested in Anthropic, while Microsoft has a close financial relationship with OpenAI.
The FTC wants information on the specific investment agreements between the companies and how the partnerships influence product releases and oversight rights. It also wants an analysis of how these investments impact the market share, competition, and potential for sales growth in the sector; if there is competition for resources to develop AI products; and any information each company may have given to other government entities.
The companies have 45 days to respond to the agency. The Verge reached out to Anthropic for comment. OpenAI and Amazon declined to comment.
“The US has assumed a global AI leadership position because important American companies are working together,” Microsoft corporate vice president, competition and market regulation group, Rima Alalily said in a statement sent to The Verge. “Partnerships between independent companies like Microsoft and OpenAI, as well as among many others, are promoting competition and accelerating innovation. We look forward to providing the FTC with the information it needs to complete its study.”
Google, in a comment sent to The Verge, hopes the FTC’s study “will shine a bright light” on companies that lock in customers.
Both Anthropic and OpenAI got huge sums from the larger companies. Microsoft is the biggest investor in OpenAI and recently joined its board in a nonvoting observer role after the failed ouster of CEO Sam Altman and his short-lived hiring by Microsoft. Microsoft was rumored to have invested $10 billion in OpenAI. This close relationship allowed Microsoft to launch GPT-4-powered applications in its Copilot service.
AI developers often ink partnerships with cloud providers — which Google, Microsoft, and Amazon are — to get cheaper access to the expensive GPUs and processors needed to train, run, and fine-tune large language models.
The government has been very interested in investigating the relationship between OpenAI and Microsoft and has reportedly argued with the Department of Justice over who will start the inquiry.
“History shows that new technologies can create new markets and healthy competition. As companies race to develop and monetize AI, we must guard against tactics that foreclose this opportunity,” FTC Chair Lina Khan said in a statement. “Our study will shed light on whether investments and partnerships pursued by dominant companies risk distorting innovation and undermining fair competition.”
The FTC was the first government agency to investigate OpenAI. It requested documents from the ChatGPT maker in July seeking information on possible consumer harm from publishing false information.
UPDATE JANUARY 25 4:36 PM ET: Added statements from Microsoft and Google.