US Regulators Target Microsoft, OpenAI Violations In AI Antitrust Probe

The U.S. Justice Department and the Federal Trade Commission have reached a deal that allows them to proceed with antitrust investigations into the dominant roles that Microsoft, OpenAI and Nvidia play in the artificial intelligence industry, the New York Times reported on Wednesday, citing people familiar with the matter.

Under the deal, the U.S. Department of Justice will take the lead in investigating whether Nvidia violated antitrust laws, while the FTC will examine the conduct of OpenAI and Microsoft, the report said. While OpenAI’s parent is a nonprofit, Microsoft has invested $13 billion in a for-profit subsidiary, for what would be a 49% stake.

The Microsoft-OpenAI partnership is also under informal scrutiny in other regions.

The regulators struck the deal over the past week and it is expected to be completed in the coming days, the report said, citing two people with knowledge of the matter.

The FTC is said to be looking into Microsoft’s $650 million deal with AI startup Inflection AI, the Wall Street Journal reported on Thursday, citing a person familiar with the matter.

The moves signal growing regulatory scrutiny into the AI industry. In January, the FTC ordered OpenAI, Microsoft, Alphabet Amazon and Anthropic to provide information on recent investments and partnerships involving generative AI companies and cloud service providers.

In July last year, the FTC opened an investigation into OpenAI on claims it had run afoul of consumer protection laws by putting personal reputations and data at risk.

Last week, U.S. antitrust chief Jonathan Kanter referred to “structures and trends in AI that should give us pause,” at an AI conference, adding that the technology relies on massive amounts of data and computing power, which can give already-dominant firms a substantial advantage.

Microsoft, OpenAI, Nvidia, the Justice Department and FTC did not immediately respond to requests for comment outside regular business hours.