U.S. antitrust authorities are delving into the involvement of major tech companies in the rapid expansion of artificial intelligence (AI), examining whether the business practices of established players hinder competition in this burgeoning sector.
The U.S. Department of Justice and the Federal Trade Commission (FTC) are taking steps to allocate responsibilities among the largest industry players, potentially setting the stage for investigations into Nvidia (NVDA.O), OpenAI, and Microsoft (MSFT.O).
Assistant Attorney General Jonathan Kanter, speaking at a University of Chicago event in April, underscored a “sense of urgency” in addressing the advantages enjoyed by large companies in accessing data crucial for training AI models. He highlighted concerns about limited competition stemming from data aggregation in the hands of a few major players.
Kanter also raised concerns about the impact of generative AI on creative individuals whose work it could imitate, as well as on the engineers developing the technology. He warned of potential exploitation by AI companies, emphasizing the need for competition to protect creators’ rights and prevent monopolistic practices.
Additionally, the FTC, which recently moved to prohibit noncompete agreements, has expressed apprehension about AI employers impeding competition by restricting skilled workers from joining rival firms. Last year, the FTC flagged potential issues with AI companies and cloud service providers, including OpenAI, Microsoft, Alphabet (GOOGL.O), Amazon (AMZN.O), and Anthropic, ordering them to disclose information on recent investments and partnerships.
FTC Chair Lina Khan emphasized concerns about these partnerships potentially granting dominant firms undue influence or preferential access, potentially undermining fair competition across various layers of the AI ecosystem. She stressed the importance of scrutinizing partnerships to ensure they do not circumvent merger reviews.
