The extraordinary AI boom it didn’t go unnoticed. Indeed, it appears that the US Department of Justice (DOJ) and the Federal Trade Commission (FTC) have set their sights on the AI industry for a new level of scrutiny: both departments are opening separate investigations to determine behavior of the parties involved, dividing the tasks.
NVIDIA, Microsoft and OpenAI have therefore ended up under the scrutiny of regulatory bodies: according to a Reuters report, the United States Department of Justice will examine the possibility of violations of antitrust laws in NVIDIA’s AI business, while the FTC will be responsible for investigation into the partnership between Microsoft and OpenAI.
It’s no surprise that authorities are investigating a rapidly growing market sector like artificial intelligence, and the involvement of both the DOJ and the FTC shows that regulators are taking matters into their own hands. While NVIDIA has not yet violated antitrust laws, the investigation could open new cases, similar to what happened in 2019 when regulators cracked down on big tech companies over alleged trade violations.
Microsoft, as we know, has a long history with regulators, especially in the case of the merger with Activision and how the long antitrust case finally ended in Microsoft’s favor. Reuters reports that the FTC will review Microsoft’s investments in OpenAI and Inflection AI. However, when discussing the collaboration with Inflection AI, Microsoft stated that it had complied with all legal obligations.
For a quick summary, the FTC began its investigation into the AI industry in January, when the regulator examined the AI-related practices of OpenAI, Microsoft, Alphabet, Amazon, and Anthropic. Recently, former OpenAI employees sent a public letter expressing concerns about rapidly growing AI markets and how they encountered a “lack of regulation.” These factors acted as catalysts for the recent DOJ and FTC decision and could open up new disputes and controversies as antitrust laws are violated by the companies involved.
According to the New York Times, there are growing concerns in the sector due to the dominant position of NVIDIA, while Microsoft, after the integration of OpenAI models and after having obtained possession of 49% of the company, is now one of the players major players in the AI market. It will be interesting to see how the DOJ and FTC might change the dynamics of the markets, especially given that at the legislative level the United States does not yet have clear rules on artificial intelligence.
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