Federal regulators have reached a deal that allows them to continue antitrust investigations into the dominant roles Microsoft, OpenAI and Nvidia play in the artificial intelligence industry, in the strongest sign yet of how regulatory scrutiny over the powerhouse has intensified. technology.
The Justice Department and the Federal Trade Commission reached the agreement last week and it is expected to be completed in the coming days, according to two people with knowledge of the matter, who were not authorized to speak publicly about the confidential discussions.
Under the agreement, the Justice Department will take the lead in investigating whether the behavior of Nvidia, the largest ai chip maker, has violated antitrust laws, the people said. The FTC will play a lead role in examining the conduct of OpenAI, which makes the ChatGPT chatbot, and Microsoft, which has invested $13 billion in OpenAI and has made deals with other ai companies, the people said.
The settlement signals heightened scrutiny by the Justice Department and the FTC on ai, a rapidly advancing technology that has the potential to disrupt jobs, information and people's lives. Both agencies have been at the forefront of the Biden administration's efforts to rein in the power of the biggest tech companies. After a similar settlement in 2019, the government investigated Google, Apple, amazon and Meta and has since sued each of them for violating antitrust laws.
For months, Nvidia, Microsoft and OpenAI largely escaped the brunt of the Biden administration's regulatory scrutiny. But that began to change when generative ai, which can produce human-like text, photos, videos and audio, burst onto the scene in late 2022 and created a frenzy in the industry.
Regulators have recently signaled that they want to get ahead of advances in ai. In July, the FTC opened an investigation into whether OpenAI had harmed consumers through its data collection. In January, the FTC also launched a broad investigation into strategic partnerships between tech giants and ai startups, including Microsoft's investment in OpenAI and Google and amazon's investments in Anthropic, another young ai company.
Still, the United States lags behind Europe in regulating artificial intelligence. European Union officials last year agreed to landmark rules to govern the rapidly evolving technology, focusing on the riskiest ways it can be used. Last month in Washington, a group of senators released legislative recommendations for ai, calling for $32 billion in annual spending to boost American leadership in the technology but holding off on calling for specific new regulations.
Discussions between the FTC and the Justice Department over ai companies entered their final stages last week and involved the highest levels of both agencies, said a person with knowledge of the discussions, who is an FTC official.
FTC Chairwoman Lina Khan ai-antitrust-concerns-at-harvard-law-school/” title=”” rel=”noopener noreferrer” target=”_blank”>he said in a February interview that when it came to ai, the agency was trying to detect “potential problems early on rather than years and years and years later, when the problems are deeply rooted and much more difficult to rectify.”
Spokeswomen for the FTC and the Justice Department declined to comment. Microsoft and OpenAI did not immediately respond to requests for comment. An Nvidia representative declined to comment.
Nvidia, OpenAI and Microsoft have been in the spotlight as some of the biggest winners from the ai boom, raising questions about their dominance.
Nvidia, a Silicon Valley chipmaker, is the leading supplier of graphics processing units, or GPUs, which are components tailored for artificial intelligence tasks such as machine learning. After ai took off, tech companies rushed to snap up Nvidia GPUs, doubling and tripling their sales. Nvidia's stock price has soared more than 200 percent over the past year, and the company's market capitalization surpassed $3 trillion for the first time on Wednesday, surpassing Apple.
Industry players are increasingly concerned about Nvidia's dominance, said two people with knowledge of the concerns, including how the company's software forces customers to use its chips, as well as how Nvidia distributes those chips to customers. customers.
Microsoft, the world's most valuable public technology company, has also become a leading provider of artificial intelligence. It owns 49 percent of OpenAI, which burst into public consciousness with the launch of ChatGPT in 2022. The chatbot's ability to answer questions, generate images and create computer code captivated people and quickly made the startup one of the most prominent companies in the technology industry.
Microsoft has integrated OpenAI technology into its own products. ai now generates answers for users of its search engine, Bing, and can help create presentations and documents in PowerPoint and Word. (The New York Times has sued OpenAI and Microsoft, alleging copyright infringement of news content related to ai systems.)
Microsoft's ai deals have drawn scrutiny for giving one of the biggest tech companies leverage over an emerging technology, while some in the industry have raised questions about whether the deals are structured in a way that allows Microsoft to avoid review. direct from regulators.
Microsoft structured its minority stake in OpenAI in part to avoid antitrust scrutiny, The Times reported. Microsoft also reached a deal in March to hire most of the staff from Inflection ai, another artificial intelligence startup, and license its technology. Because the deal was not a standard acquisition, it may be more difficult for regulators to scrutinize it.
Last week, the Justice Department's antitrust division hosted a conference on ai at Stanford University. In his opening remarks, Jonathan Kanter, the agency's top antitrust official, pointed to “structures and trends in ai that should give us pause.”
“ai relies on enormous amounts of data and computing power, which can give already dominant companies a substantial advantage,” he said.
