FTC Scrutinizes Microsoft-OpenAI Alliance Amidst AI Power Struggle and Potential Antitrust Concerns

The recent announcement from the United States Federal Trade Commission (FTC) raises significant concerns about the potential implications of the collaboration between Microsoft and OpenAI. The report suggests that Microsoft's partnership could leverage its strong position in cloud computing to dominate the burgeoning artificial intelligence sector.

Highlighting the broader industry trend, the FTC also pointed towards other tech giants like Amazon and Google forming alliances with AI firms, such as Anthropic, potentially leading to future acquisitions that could further consolidate industry power. As OpenAI's largest shareholder, Microsoft openly revealed its investment in OpenAI last October, amounting to $13 billion by the end of September 2024.

The FTC report, as voiced by Chair Lina Khan, emphasizes how these collaborations could potentially restrict vital AI resources for startups and result in significant knowledge leakage, undermining fair competition. The FTC’s mandate encompasses broader market research to inform potential regulatory actions, yet the course of action by its current leadership remains uncertain.

Investigation into these AI investments began last year, scrutinizing the hefty capital infusion from global cloud service leaders into AI startups, with OpenAI and Anthropic at the forefront. Notably, due to the transaction structure, these companies did not notify U.S. antitrust bodies prior to their dealings.

Since 2023, the FTC has also been examining whether OpenAI's ChatGPT has violated consumer protection laws, reflecting a continued focus on AI's market dynamics. In parallel, a comprehensive antitrust probe into Microsoft was initiated last November, covering diverse areas including cloud computing, cybersecurity, and artificial intelligence.