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    Report: US Department of Justice and FTC to investigate Nvidia, OpenAI and Microsoft

    The US Department of Justice and the Federal Trade Commission (FTC) are set to open an antitrust investigation into OpenAI, Microsoft, and Nvidia, the largest manufacturer of AI chips, the New York Times reported based on sources. The two bodies have struck a deal to jointly investigate antitrust violations in the field of AI with the Justice Department examining Nvidia and the FTC investigating OpenAI and Microsoft.

    This will mark the first investigation into NVIDIA, as per CNBC, following its attainment of a $2.7 trillion market cap and its dominance in the AI chip market, controlling between 70% and 95% of the market.

    The FTC’s Probes Into Generative AI

    The FTC has already opened an investigation into OpenAI. In July, the Commission stated that the AI company might be violating consumer protection laws by putting users’ reputations and data at risk.

    This investigation came after the FTC published a blog regarding competition concerns arising from Generative Artificial Intelligence. The blog stated that data, talent, and computational resources are the essential building blocks of Generative AI and access to these might influence competition. It also noted that there was more potential for unfair methods for competition in the AI market such as large AI companies bundling and tying their services, providing exclusive dealings, or in activity to consolidate market power in the hands of a few players.

    The blog stated, “Large firms already active in generative AI—or that already control a critical input—may try to buy up critical applications and cut off rival access to core products.”

    The blog noted that network effects could impact the competition landscape of generative AI, stating, “A first mover could secure a significant advantage over its competitors because its models, having interacted with more users for longer periods, can generate more engaging and useful content than rival products.”

    The FTC also opened an inquiry into investments and partnerships involving generative AI companies and major cloud service providers to assess their impact on competition in the AI landscape. This included Microsoft’s investment in OpenAI as well as Google’s and Amazon’s investments into Anthropic including information related to market share, competitors, potential for sales growth, or expansion into product or geographic markets.

    Series of Investigations Into OpenAI

    In December 2023, The UK’s competition watchdog, the Competition and Markets Authority (CMA) invited comments from third parties to asses whether the partnerships between Microsoft and Mistral AI, and Microsoft’s arrangements with Inflection AI along with Amazon and Anthropic need to be reviewed under UK’s merger laws and the impact of these collaborations on competition in the UK.

    Similarly, the European Commission announced in January this year that it is looking into competition concerns in the generative AI market, including whether the partnership between OpenAI and Microsoft might be reviewable under the EU’s merger regulation.

    India has also taken steps to investigate the competition concerns arising from AI. In April of this year, the Commission invited proposals to understand the emerging concerns around competition in developing and deploying AI systems and its impact on innovation in key sectors.

    Also Read:

    UK Competition Regulator To Look into Major AI Partnerships: Microsoft-Mistral, Amazon-Anthropic, and More

    US launches inquiry into AI partnerships involving Microsoft, OpenAI, Google, Anthropic, Amazon

    AI Researchers, Ex-Employees of Frontier AI Companies Ask For Greater Whistleblower Protections

    Fired For Raising Safety Concerns, Says Former OpenAI Researcher

    The post Report: US Department of Justice and FTC to investigate Nvidia, OpenAI and Microsoft appeared first on MEDIANAMA.

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