FTC probe into Microsoft’s $13B OpenAI investment deal raises competition concerns

The Federal Trade Commission (FTC) has launched an inquiry into Microsoft’s $13 billion investment in OpenAI, the parent company of ChatGPT. The FTC’s investigation aims to understand how such investments could potentially impact competition and innovation in the tech industry.

Microsoft’s investment in OpenAI is part of a broader trend of tech giants investing heavily in artificial intelligence (AI) startups. These investments allow larger companies to form deep ties with smaller rivals, potentially influencing the competitive landscape.

FTC’s inquiry into Microsoft and OpenAI

FTC’s inquiry will scrutinize these investment deals, focusing on their strategic rationale and practical implications, including decisions around new product releases.
Microsoft’s relationship with OpenAI has been under scrutiny since it offered to hire Sam Altman after he was ousted as OpenAI’s CEO. Despite Microsoft not having representation on OpenAI’s board, this move highlighted the tech giant’s influence on the startup.

This investigation follows similar examinations by Britain’s Competition and Markets Authority and the European Union’s executive branch. These regulatory bodies have also expressed concerns that Microsoft’s partnership with OpenAI could trigger antitrust investigations.

Microsoft has defended its partnerships with AI startups, stating that they are crucial for fostering innovation and competition. On the other hand, The NY Times has already sued Microsoft and OpenAI for copyright infringement. However, Microsoft has expressed its willingness to fully cooperate with the FTC’s inquiry.