US regulators are investigating Microsoft, OpenAI, and Nvidia for potential antitrust violations in AI industry
From The Globe and Mail: 2024-06-06 12:00:04
The U.S. Justice Department and FTC have agreed to investigate Microsoft, OpenAI, and Nvidia for potential antitrust violations in the AI industry due to concerns over market dominance. Nvidia’s market value recently surpassed $3 trillion, with the Justice Department focusing on potential antitrust violations by Nvidia specifically.
The agreement between the agencies signals growing regulatory scrutiny over the concentration of power in the AI industry, with Microsoft and Nvidia being two of the largest companies globally. U.S. antitrust enforcers are concerned about Big Tech companies’ advantage in data access for training AI models and potential anticompetitive partnerships.
Regulators are set to investigate whether Nvidia, OpenAI, and Microsoft violated antitrust laws, as part of a deal struck over the past week. Nvidia holds about 80% of the AI chip market, a domination that results in gross margins of 70%-80%. Microsoft has invested $13 billion in a for-profit subsidiary for a 49% stake.
The FTC is responsible for examining OpenAI and Microsoft’s conduct, while the Justice Department will lead the investigation into Nvidia. This comes after the FTC previously ordered major AI players to provide information on recent investments and partnerships involving generative AI companies and cloud service providers.
Microsoft’s $650 million deal with AI startup Inflection AI is also under scrutiny, with concerns that the deal was an attempt to bypass merger disclosure requirements. The agreement allowed Microsoft to utilize Inflection’s models and hire most of the startup’s staff while still allowing Inflection to operate independently.
Regulators are closely monitoring the AI industry due to concerns over potential antitrust violations by major players like Microsoft, Nvidia, and OpenAI. The agreement between the Justice Department and the FTC highlights the growing regulatory scrutiny in the tech industry, particularly in the AI sector.
Read more at The Globe and Mail: U.S. sets stage for antitrust probes into Microsoft, OpenAI and Nvidia