FTC Opens Probe into OpenAI, Anthropic and Cloud Partners

The FTC is looking into the anti-competitive impact of Microsoft's tie-up with OpenAI, as well as Anthropic-Amazon, Google deals.

Ben Wodecki, AI Business

January 29, 2024

2 Min Read
The flag of the US FTC and flag of USA
Alamy

The U.S. Federal Trade Commission has launched an inquiry into startups OpenAI and Anthropic over any potential anti-competitive impact stemming from their multibillion-dollar partnerships with and investments from hyperscalers Microsoft, Google and Amazon.

“History shows that new technologies can create new markets and healthy competition. As companies race to develop and monetize AI, we must guard against tactics that foreclose this opportunity, “said FTC Chair Lina M. Khan, in a statement.

OpenAI enjoys a strategic partnership with Microsoft, which has seen the latter invest a reported $13 billion in the ChatGPT maker. Amazon and Google invested $4 billion and $2 billion in Anthropic, respectively. Anthropic uses AWS as its main cloud provider.

Under their agreements, OpenAI and Anthropic have given exclusive access to their models to their respective cloud provider partners. The FTC’s investigation will look at the impact these deals will have on the competitive generative AI landscape.

The FTC is specifically wanting information on the following:

  • Specific agreements and the strategic rationale of an investment/partnership

  • Practical implications of partnership or investments – including decisions around new product releases, governance or oversight rights and topics of regular meetings

  • Any figures or analysis of potential competitive impact, including information related to competition, competitors’ potential for sales growth and expansion into expansion into product or geographic markets.

Related:Top Tech Trends and Predictions 2024 From Industry Insiders

Under Section 6(b) of the FTC Act, the agency can obtain information from businesses to conduct studies on market trends and business practices.

The quintet has 45 days from the date of the order to submit relevant materials.

Second Probe of OpenAI

This is the second investigation into OpenAI’s deal with Microsoft. The U.K.'s Competition Authority started a probe last December into their partnership’s impact on market dynamics.

The U.K. authority is specifically looking at whether the pair engages in a “relevant merger situation” – in which a company has not been merged outright but certain transactions and arrangements may impact operations, like commercial arrangements or the acquisition of a minority stake.

The FTC probe is the first such investigation into Anthropic, which thus far has not garnered the same level of scrutiny as OpenAI.

Alongside regulatory probes into its partnerships, OpenAI currently faces legal headaches as well: a libel lawsuit in Georgia and a copyright infringement suit brought by The New York Times. In the libel case, OpenAI argues its chatbot’s output was not published and therefore could not libel the plaintiff. OpenAI also rebuts the Times’ claims, adding that it does not need to train on its news content.

Read more about:

AI Business

About the Author(s)

Ben Wodecki

Assistant Editor, AI Business

Ben Wodecki is assistant editor at AI Business, a publication dedicated to the latest trends in artificial intelligence.

AI Business

AI Business, a DCK sister site, is the leading content portal for artificial intelligence and its real-world applications. With its exclusive access to the global c-suite and the trendsetters of the technology world, it brings readers up-to-the-minute insights into how AI technologies are transforming the global economy - and societies - today.

Sign up for the ITPro Today newsletter
Stay on top of the IT universe with commentary, news analysis, how-to's, and tips delivered to your inbox daily.

You May Also Like