The Federal Trade Commission is taking a closer look at the competitive landscape for artificial intelligence companies, and plans to examine investments into the technology by
Microsoft,
Alphabet,
and
Amazon.
com.
The FTC has issued orders to five companies seeking information about recent investments and partnerships involving AI, it said Thursday. The requests were to Microsoft and its partner OpenAI, as well as to Alphabet and Amazon—both of which have invested in the AI software company Anthropic, the fifth target on the FTC’s list.
“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.”
Microsoft said it was cooperating with the request.
“The U.S. has assumed a global AI leadership position because important American companies are working together,“ Rima Alaily, Microsoft’s Corporate Vice President, Competition and Market Regulation Group, said in a statement. “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 used the announcement to suggest that Microsoft and OpenAI are taking a walled-garden approach to AI that it thinks is bad for customers. “We hope the FTC’s study will shine a bright light on companies that don’t offer the openness of Google Cloud or have a long history of locking-in customers – and who are bringing that same approach to AI services,” Google said in a statement.
Anthropic said it had no immediate comment on the FTC probe. Amazon also declined to comment.
The Commission said it will “scrutinize corporate partnerships and investments with AI providers to build a better internal understanding of these relationships and their impact on the competitive landscape.” The companies have 45 days to respond.
Microsoft has reportedly invested $13 billion in OpenAI, the creator ChatGPT and other AI software. Amazon has announced an investment of up to $4 billion in Anthropic. Alphabet’s Google unit has disclosed plans to invest $2 billion in Anthropic, which among other things operates the Claude chatbot.
One thing worth noting is that these are hardly the only corporate investments in leading AI start-ups. Both
Nvidia
and
Oracle
have investments in Cohere, a large language model, or LLM, software company.
Hewlett Packard Enterprise
has a stake in the European LLM company Aleph Alpha. Hugging Face—a marketplace for AI models—has investments from a large group of tech companies, including Google, Amazon,
IBM,
Salesforce,
Advanced Micro Devices,
Intel, and
Qualcomm.
Write to Eric J. Savitz at eric.savitz@barrons.com
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