Federal regulators have reached an agreement to initiate antitrust investigations into the dominant roles of Nvidia, Microsoft, and OpenAI in the rapidly evolving artificial intelligence (AI) industry, according to two sources familiar with the matter, as reported by The New York Times on Tuesday.
Under the deal, which is expected to be finalised in the coming days, the U.S. Department of Justice will lead the probe into whether Nvidia, the leading manufacturer of AI chips, violated antitrust laws. The Federal Trade Commission (FTC) will examine the conduct of Microsoft and OpenAI, the creator of the popular ChatGPT chatbot.
Microsoft has invested $13 billion in OpenAI for a reported 49% stake in the AI firm’s for-profit subsidiary, despite its parent organization being a non-profit. This partnership is also under informal review in other jurisdictions.
The investigations mark the most significant regulatory scrutiny yet into the AI sector, which has seen explosive growth and potential for disruption. Both the Justice Department and FTC have been at the forefront of the Biden administration’s efforts to rein in the power of big tech.
In a similar arrangement in 2019, the government launched antitrust probes into Google, Apple, Amazon, and Meta, eventually filing lawsuits alleging violations of antimonopoly laws.
The FTC is also separately investigating Microsoft’s $650 million acquisition of AI startup Inflection AI, as part of a broader inquiry into the tech giant’s business practices in the AI industry, according to The Wall Street Journal.
FTC Chair Lina Khan emphasized the importance of identifying potential AI-related issues early on, stating in a February interview, “When it comes to Artificial Intelligence, our goal is to spot potential problems at their inception rather than years and years and years later, when problems are deeply baked in and much more difficult to rectify.”
The outcome of these investigations could have far-reaching implications for the future of the AI industry and the business models of the companies involved. Regulators worldwide are grappling with how to oversee the transformative technology’s development and deployment.
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