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Updated January 26th, 2024 at 08:41 IST

US antitrust probe targets OpenAI, Anthropic's Big Tech deals

The consolidation of deals between a few powerful players and Big Tech has sparked antitrust concerns.

Business Desk
OpenAI
OpenAI | Image:Unsplash
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The US Federal Trade Commission has announced an inquiry into recent investments and partnerships involving generative AI companies and major cloud service providers such as OpenAI, Microsoft, Alphabet, Amazon, and Anthropic.

Generative AI, similar to ChatGPT, utilises data to generate new content and has attracted scrutiny from lawmakers and regulators worldwide over concerns related to national security, influence operations, and fraud potential.

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The consolidation of deals between a few powerful players and Big Tech has sparked antitrust concerns. The FTC's orders will enable a closer examination of agreements between Microsoft, Google, Amazon, and AI providers to evaluate their impact on competition.

Former FTC chair William Kovacic stressed that the agency's actions signal vigilance and readiness for potential future intervention. The extensive document request seeks insights into how partnerships with Big Tech influence strategic decisions, pricing strategies, access granting, and personnel decisions.

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Microsoft expressed willingness to cooperate with the FTC's review, highlighting the collaborative efforts among American companies in advancing AI. Google voiced hope that the inquiry would shed light on less transparent companies and those with a history of customer lock-ins.

Anthropic and Amazon declined to comment, while OpenAI didn't immediately respond to requests for comment.

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Last June, the FTC outlined potential anticompetitive areas and stressed upon the importance of competition in data, talent, and computational resources.

FTC Chair Lina Khan underscored AI as a focal point for the agency's scrutiny to ascertain if the technology is dominated by a few companies. Corporate investors, notably Microsoft and Amazon, have been prominent in AI funding, contributing to 90 per cent of generative AI private fundraising in 2023.

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Reports indicate that the US Justice Department and the FTC are in discussions over which agency should investigate ChatGPT maker OpenAI on antitrust grounds, particularly concerning its partnership with Microsoft.

Microsoft's major investment in OpenAI has drawn antitrust attention, given its commitment to inject billions of dollars into the AI firm last year.

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OpenAI and Anthropic, known for developing foundation models, have garnered notable investments, comprising over 10 per cent of total US venture funding for startups last year.

Anthropic secured agreements worth $4 billion from Amazon and over $2 billion from Alphabet. 

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The funding, often in the form of cloud credits, has raised concerns within the venture and startup communities.

(With Reuters Inputs)

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Published January 26th, 2024 at 08:26 IST

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