Global: FTC Initiates Probe into Generative AI Partnerships, Examining Competitive Impact

The Federal Trade Commission (FTC) has launched an investigation into investments and partnerships within the generative artificial intelligence (AI) sector. Google parent company Alphabet, Amazon, Anthropic, Microsoft, and OpenAI have been directed to furnish information regarding these activities, as announced in a press release on Thursday, January 25.

The inquiry is designed to scrutinize the potential impact of these relationships on the competitive landscape. FTC Chair Lina M. Khan emphasized that the objective of the study is to ensure that companies involved in the development and monetization of AI are not employing tactics that impede the emergence of new markets and hinder healthy competition.

Khan stated in the release, “Our study will shed light on whether investments and partnerships pursued by dominant companies risk distorting innovation and undermining fair competition.”

The information obtained through these orders may influence future actions undertaken by the FTC, as specified in the release. The FTC is specifically seeking details about agreements, strategic rationales, practical implications, competitive impacts, competition for AI inputs and resources, and any information shared with other government entities.

The examined actions include the extension of Microsoft and OpenAI’s partnership, the strategic collaboration between Amazon and Anthropic, and the expansion of the alliance between Google and Anthropic, according to the release.

Companies receiving the orders are required to respond within 45 days of receipt. The orders were issued unanimously following a vote by the FTC.

Lina M. Khan had previously mentioned in March the FTC’s vigilance over the AI industry, with the aim of preventing domination by existing Big Tech companies and ensuring that claims made about AI products are not overstated.

Given the substantial data and storage requirements of machine learning, there is a potential concern that this demand could lead to the further consolidation of large companies, as highlighted by Khan earlier.

In parallel, European regulators are also evaluating whether Microsoft’s association with OpenAI necessitates further investigation. The European Commission invited businesses and experts on January 9 to share insights into competition issues observed in the AI sector.