US to Probe Microsoft, Nvidia, OpenAI for Antitrust Breaches

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Facts

• The US Federal Trade Commission (FTC) and US Dept. of Justice (DOJ) are preparing unprecedented regulatory scrutiny of tech giants Microsoft, OpenAI, and Nvidia and their conduct in the artificial intelligence (AI) sector.¹
• The two agencies reportedly reached a deal last week, which will be completed in the coming days. The agreement ends a lengthy dispute over how AI oversight should be divided between the FTC and DOJ.²
• The DOJ will investigate Nvidia and its market dominance in high-end semiconductors that underpin AI computing. Meanwhile, the FTC will probe any unfair advantages Microsoft and OpenAI have, according to sources familiar with the negotiations.³
• The FTC is also reportedly investigating if Microsoft structured its latest $650M licensing deal with Inflection AI to circumvent antitrust review.⁴
• Jonathan Kanter, head of the DOJ's antitrust division, reportedly declared an urgent examination of AI 'monopoly choke points' and the competitive landscape.⁵
• In January, the FTC also began a probe into recent deals by Alphabet, Amazon, Anthropic, Microsoft, and OpenAI regarding collaboration and investments regarding generative AI firms and cloud services providers.⁶

Sources: ¹Washington Post, ²New York Times, ³Politico, ⁴Wsj, ⁵Guardian and ⁶reuters.com.

Narratives

• Narrative A, as provided by ft.com. Federal regulation becomes even more important when managing a development as significant as AI. Public concerns can be mitigated at this stage of the sector's blooming without being too invasive. The hyper-competition that ChatGPT's arrival has sparked needs to be monitored, and controlled, if necessary, to ensure that AI remains a responsible technology that benefits the world.
• Narrative B, as provided by GIS Reports. Antitrust agencies must allow the market to unfold instead of being self-righteously proactive and overbearing. Regulatory agencies often operate with considerable autonomy — allowing them to shape the dialogue and maintain a narrative of protecting consumer interests. They must be cautious not to go overboard and stifle a nascent and promising industry.

Predictions