US Regulatory Agencies Set Sights on AI Market Dominance

The US DOJ and FTC reportedly agreed to divide responsibility for investigating Nvidia, Microsoft and OpenAI, the three major players in the artificial intelligence industry.

The US Justice Department and Federal Trade Commission reportedly plan investigations into whether Nvidia, Microsoft, and OpenAI are hampering competition in artificial intelligence technology. 

The New York Times reported that the Justice Department will focus on Nvidia, while the FTC will concentrate on Microsoft and OpenAI.

According to Ars Technica, one area of focus for the DOJ will be Nvidia’s dominance in the chip industry, particularly how the company’s software may lock customers into using its chips. Nvidia declined to comment on the matter.

In an interview with the Financial Times, Assistant Attorney General Jonathan Kanter highlighted that the DOJ is examining potential “monopoly choke points and the competitive landscape” within AI, ranging from computing power to essential hardware such as GPUs.

"Sometimes the most meaningful intervention is when the intervention is in real time," Kanter told the Financial Times. "The beauty of that is you can be less invasive."

The FTC’s probe into Microsoft includes scrutiny of a March 2024 deal whereby Microsoft hired the CEO of AI startup Inflection and most of its staff, along with paying $650 million to license Inflection’s technology. The Wall Street Journal reported that the FTC is investigating if Microsoft structured the deal to avoid government antitrust review.

Microsoft’s investment and profit-sharing agreement with OpenAI have also faced regulatory scrutiny. Microsoft President Brad Smith defended the partnership, asserting that it has added competition to the AI marketplace, a statement reported by the Financial Times. 

 

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