US FTC to scrutinize 5 big tech cos investments into GenAI

San Francisco: The US Federal Trade Commission (FTC) has issued orders to five Big Tech companies, including Microsoft and Google, requiring them to provide information regarding recent investments and partnerships involving generative AI companies like OpenAI and Anthropic.

The agency will scrutinise corporate partnerships and investments with AI providers to build a better internal understanding of these relationships and their impact on the competitive landscape.

The compulsory orders were sent to Alphabet (Google’s parent company), Amazon, Anthropic, Microsoft and OpenAI.

Google and Amazon invested in Anthropic, while Microsoft has invested close to $10 billion in Sam Altman-run ChatGPT creator OpenAI.

“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,” she said in a statement.

The FTC’s inquiry will help the agency deepen enforcers' understanding of the investments and partnerships formed between generative AI developers and cloud service providers.

The companies will have 45 days from the date they receive the order to respond.

The FTC is seeking information on the specific investment agreements between the companies and how the partnerships influence product releases and oversight rights.

The agency also wants an analysis of how these investments impact the market share, competition, and potential for sales growth in the sector; if there is competition for resources to develop AI products; and any information each company may have given to other government entities.

A Microsoft spokesperson told The Verge that they “look forward to providing the FTC with the information it needs to complete its study.”

Google said the FTC’s study “will shine a bright light” on companies that lock in customers.