Regulatory storm sweeps tech giants! Amazon (AMZN.US) is said to be under FTC investigation for its collaboration with AI startup Adept.
AInvestTuesday, Jul 16, 2024 8:44 pm ET
1min read
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According to reports, the US Federal Trade Commission (FTC) has opened an informal inquiry into Amazon.com (AMZN.US)’s partnership with AI startup Adept. A source said the FTC is seeking more information about the deal announced last month that involves Amazon hiring key executives from Adept and acquiring technology.

The move comes as US and overseas regulators scrutinise the investments and partnerships of tech companies with AI startups. In January, the FTC announced it was investigating recent AI deals by Amazon, Alphabet (GOOGL.US) and Microsoft (MSFT.US), while the US Department of Justice is investigating chipmaker Nvidia (NVDA.US) for promoting AI trends.

The UK’s Competition and Markets Authority said it was investigating Microsoft’s hiring of top talent from AI startup Inflection AI. The regulator warned in a report in April that Microsoft’s partnership with Inflection AI and Amazon’s with AI startup Anthropic could “shape these markets in their own interests”.

Legislators including Oregon Democrat Ron Wyden have pointed to the Amazon-Adept deal as an example of how tech companies are licensing technology or “acquiring” to avoid antitrust scrutiny.

As part of the deal announced last month, Amazon hired Adept’s co-founder and chief executive David Luan and “a few other very talented team members” to join its general artificial intelligence team. The deal also agreed to license Adept’s technology, multimodal models and some datasets.

Adept said last month that developing its own AI models would require more funding and added that the deal with Amazon would allow it to focus on building AI agents.

The Adept deal is the latest significant investment by Amazon in the AI space. Amazon has also invested tens of billions of dollars in Anthropic, a rival to OpenAI, and has developed generative AI products in its cloud computing, retail and consumer electronics businesses.

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