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FTC investigating relationships between AI startups, tech giants

The Federal Trade Commission (FTC) is launching an inquiry into several multibillion-dollar investments by major technology companies into generative artificial intelligence (AI) firms, the agency announced Thursday.

The FTC said it is seeking information about the partnerships between Microsoft and OpenAI, Amazon and Anthropic, and Google and Anthropic. All five companies were issued orders requesting more information about their investments and partnerships, the agency said.

“History shows that new technologies can create new markets and healthy competition,” FTC Chair Lina Khan said in a statement. “As companies race to develop and monetize AI, we must guard against tactics that foreclose this opportunity.”

“Our study will shed light on whether investments and partnerships pursued by dominant companies risk distorting innovation and undermining fair competition,” she added.

A Google spokesperson said in a statement Thursday that the company hopes the inquiry 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.”

Rima Alaily, corporate vice president of the Competition and Market Regulation Group at Microsoft, suggested that partnerships, like the one between Microsoft and OpenAI, are “promoting competition and accelerating innovation.”

“The U.S. has assumed a global AI leadership position because important American companies are working together,” Alaily said in a statement.

Microsoft’s close partnership with OpenAI has drawn increased scrutiny in the wake of the high-profile ouster and return of OpenAI CEO Sam Altman late last year.

After the AI firm’s board of directors fired Altman in November, Microsoft offered him a position leading a new AI research team. However, after he was brought back just days later to lead OpenAI, the company announced Microsoft would now have a non-voting position on the board.

The United Kingdom’s Competition and Market Authority announced in early December that it was launching an initial review of the partnership between the two companies and whether it had “resulted in a relevant merger situation.”

Earlier this month, the European Union similarly said it was examining whether Microsoft’s investment into OpenAI is subject to the bloc’s merger rules.

Updated 6:28 p.m. ET

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