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Big Tech’s AI partnerships draw inquiry from FTC

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The Federal Trade Commission has launched an inquiry into the partnerships between Big Tech cloud providers and generative AI companies, targeting the likes of Amazon, Microsoft and OpenAI with demands for more information about their multibillion-dollar ties.

The FTC, which regulates competition, on Thursday said it was seeking “to build a better internal understanding” of the network of partnerships and investments that have sprung up in recent years between three big cloud providers — Google, Microsoft and Amazon — and generative AI start-ups OpenAI and Anthropic. 

Microsoft’s high-profile $13bn investment into OpenAI is one of the best known partnerships between a Big Tech giant and a start-up in the fast-growing sector, but it has drawn criticism for its opaque structure. Both Amazon and Google have committed to investing billions in OpenAI rival Anthropic.

The FTC said it was seeking information about how the relationships worked, whether they posed anti-competitive risks and the implications of the partnerships, such as decisions around new product releases, governance or oversight rights.

The cloud providers have emerged as important players in the generative AI space, since they are among the few companies with the vast financial and computing resources required for the technology’s development and use. Their tie-ups typically involve the AI start-ups using the companies’ clouds or AI chips, for example. 

“History shows that new technologies can create new markets and healthy competition. As companies race to develop and monetise AI, we must guard against tactics that foreclose this opportunity,” said FTC chair Lina Khan. “Our study will shed light on whether investments and partnerships pursued by dominant companies risk distorting innovation and undermining fair competition.”

The five companies will have 45 days from receiving the order to respond.

The inquiry underscores competition regulators’ heightened concerns about the rapid pace at which Big Tech companies and other investors are pouring money into developing AI tools, and how those partnerships could shape the sector for years to come.

The UK’s and EU’s competition regulators are also examining Microsoft’s investment into OpenAI. After the UK regulator announced plans to investigate the alliance, OpenAI quietly changed the wording on its website about the deal. It had previously described Microsoft as a “minority owner” in OpenAI, but altered that to say that Microsoft had a “minority economic interest”. 

Rima Alaily, vice-president for Microsoft’s competition and market regulation group, said partnerships between companies like Microsoft and OpenAI were “promoting competition and accelerating innovation. We look forward to providing the FTC with the information it needs to complete its study.”

Google said in a statement: “We hope the FTC’s study will shine a bright light on companies that don’t offer the openness of Google Cloud or have a long history of locking-in customers — and who are bringing that same approach to AI services.”

Amazon, OpenAI and Anthropic declined to comment.

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