With the world’s tech giants investing billions in AI partnerships, the FTC is launching an inquiry into these transactions and their potential impacts on a rapidly changing market.
The federal government is investigating investments and partnerships five corporate giants may have underway, including new acquisitions, involving generative AI companies and major cloud service providers.
The Federal Trade Commission announced Thursday that it issued orders to Alphabet Inc., Amazon.com, Inc., Microsoft, OpenAI Inc., and the San Francisco-based Anthropic PBC to learn about new corporate partnerships and investments with AI providers and build an understanding of any impacts on the market and competition.
The commission voted 3-0 to issue Section 6(b) orders and conduct the study of AI investments and partnerships. That authorizes new studies of current market trends and business practices, including to inform future commission actions.
Companies have deployed a range of strategies in developing and using AI, including pursuing partnerships and direct investments with AI developers to access the latest technologies, the FTC said in a statement.
The commission is seeking specific information about new agreements and possible implications for new product releases; partnerships’ impact on market share, competition, and expansion into product markets; and data provided to any other government entity in connection with any investigation or request for information on AI market developments.
History shows that new technologies can create new markets and healthy competition. As companies race to develop and monetize AI, we must guard against tactics that foreclose this opportunity, FTC chair Lina M. Khan said. Our study will shed light on whether investments and partnerships pursued by dominant companies risk distorting innovation and undermining fair competition.
The companies have 45 days from receiving the order to respond.
The announcement by the FTC raised concerns about the potential distortion of the AI market and the impact on fair competition. While companies like Google have welcomed the study, others remain tight-lipped about their involvement in AI partnerships.
The European Union and the United Kingdom are also closely monitoring the activities of these tech giants. This month, the EU’s executive branch expressed concerns about potential mergers and acquisitions that could harm competition in the bloc, while Britain’s antitrust watchdog has already initiated a separate review process.
With the rapid advancement of AI technology, companies are venturing into partnerships and acquisitions to gain access to the latest innovations. However, there are fears that these dominant companies could use their positions to stifle competition and hinder innovation.
The FTC’s investigation aims to gather information about the nature of these agreements, their potential impact on market share and competition, and any data shared with other government entities.
While some companies have embraced transparency and voiced support for healthy competition, others have remained silent or declined to comment on the matter.
As the study progresses, it will shed light on whether these investments and partnerships risk distorting innovation and limiting fair competition in the AI market.
As the companies involved have 45 days to respond to the FTC’s orders, the tech industry and the public will eagerly await their explanations and the potential ramifications of this investigation on the AI landscape.
