US to launch antitrust probes into Microsoft, OpenAI and Nvidia

6 Jun 2024

Image: © Evgenia Parajanian/Stock.adobe.com

The US Justice Department will investigate Nvidia while the Federal Trade Commission will look into AI deals between Microsoft and OpenAI.

Regulatory bodies in the US are set to launch antitrust investigations into Microsoft, OpenAI and Nvidia to determine the extent of their dominance in the AI sector.

People familiar with the matter told The New York Times this week that the US Department of Justice and the Federal Trade Commission (FTC) have struck a deal to divvy up the investigations of potential anticompetitive behaviour among the three companies leading the charge in AI in their own ways.

Microsoft has emerged as one of the world’s leading investors in the development of AI, after backing leading start-ups such as OpenAI and Mistral. Thanks to its focus on the emerging technology, the software giant is now the world’s most valuable company by market capitalisation.

Hot on the heels of Microsoft is Nvidia, which became the world’s second most valuable company yesterday (5 June) after crossing the $3trn mark and overtaking Apple. The company has been providing the bulk of the powerful chips needed to develop generative AI models.

Meanwhile, OpenAI is currently arguably the world’s top AI company, taking the lead on its development after releasing ChatGPT in November 2022. OpenAI has strong ties with Microsoft and is heavily reliant on Nvidia hardware.

Now, the two US regulators want to probe whether deals existing between the trio give them an unfair advantage. The report suggests that the Justice Department will take the lead on investigating Nvidia under antitrust laws while the FTC will look into deals struck between Microsoft and OpenAI, valued in the billions.

This comes as US regulators are working on another high-profile Big Tech investigation into Apple, which was slammed with a major antitrust lawsuit in March over its alleged monopolistic practices. The European Commission fined Apple more than €1.8bn in the same month for breaking EU antitrust laws.

And just weeks ago, Ticketmaster and its parent company Live Nation Entertainment were slammed with a civil antitrust lawsuit by the US Justice Department for having a monopoly over and thwarting competition in the live entertainment industry.

The latest investigation stems from US regulators’ fears that the development of AI – and those behind it – needs to be checked before the technology can have a large-scale negative impact on humanity. Earlier this year, the UN adopted a landmark US-led resolution on the promotion of “safe, secure and trustworthy” AI systems.

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Vish Gain is a journalist with Silicon Republic

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