US regulators to investigate Microsoft, OpenAI, and Nvidia dominance in AI industry
From Insurance Journal: 2024-06-06 12:26:06
The U.S. Justice Department and FTC are proceeding with antitrust investigations into the dominant roles played by Microsoft, OpenAI, and Nvidia in the AI industry, as per a source familiar with the matter. DOJ will investigate Nvidia, while FTC will look into OpenAI and Microsoft’s conduct. Microsoft has invested $13 billion in a for-profit subsidiary, holding a 49% stake.
Regulators reached a deal to divvy up the industry over the past week, expected to be finalized soon. This mirrors a 2019 agreement for enforcement against Big Tech, resulting in cases against Meta, Amazon, Apple, and Google. Regulatory scrutiny is growing amid concerns about industry concentration in AI.
Nvidia holds approximately 80% of the AI chip market, including custom processors for Google, Microsoft, and Amazon. The company’s domination allows for gross margins between 70% and 80%. Nvidia declined to comment on the agreement, while OpenAI did not respond to a request for comment.
FTC is also investigating Microsoft’s $650 million deal with AI startup Inflection AI, questioning whether it was an attempt to evade merger disclosure requirements. The deal allowed Microsoft to use Inflection’s models and hire most of its staff, including co-founders. Microsoft stated the deal accelerated work on Microsoft Copilot.
The two regulators’ agreement follows an FTC order in January for OpenAI, Microsoft, Alphabet, Amazon, and Anthropic to provide information on recent investments and partnerships in generative AI firms and cloud service providers. The FTC opened an investigation into OpenAI last July on allegations of violating consumer protection laws.
U.S. antitrust chief Jonathan Kanter recently expressed concerns about AI trends at a conference, noting the substantial advantage data and computing power give dominant firms. The technology relies on massive data sets, potentially reinforcing advantages for already established companies.
Read more at Insurance Journal: US Regulators to Open Antitrust Inquiries of Microsoft, OpenAI and Nvidia