FTC Launches Inquiries into Top Generative AI Creators

FTC Launches Inquiries into Top Generative AI Creators

In a significant move, the Federal Trade Commission (FTC) has initiated investigations into five leading creators of generative AI technology. The FTC has issued orders to Amazon, Microsoft, OpenAI, Anthropic, and Alphabet, requiring these companies to provide information about their recent multi-billion-dollar investments and partnerships. This inquiry aims to scrutinize the relationships and actions of these companies to better understand their impact on the competitive landscape. Responding to concerns raised about gen AI competition, the FTC is taking swift action to ensure that healthy competition and new market opportunities are not hindered.

FTC Chair Lina M. Khan emphasized the importance of preventing tactics that foreclose the potential of new technologies, stating, “As companies race to develop and monetize AI, we must guard against tactics that foreclose this opportunity.”

Microsoft’s Response

“The U.S. has assumed a global AI leadership position because important American companies are working together. Partnerships between independent companies like Microsoft and OpenAI, as well as among many others, are promoting competition and accelerating innovation. We look forward to providing the FTC with the information it needs to complete its study.” – Rima Alaily, Corporate VP for Competition and Market Regulation at Microsoft

The investigations are particularly focused on three recent multi-billion-dollar investments. The FTC is seeking information regarding the nature and extent of interactions, company influence, decision-making processes, discontinuation of products and services, personnel decisions, as well as analyses, reports, studies, and surveys related to the transactions. Additionally, the tech companies must disclose any agreements on inclusivity, privileged access, restrictions, or conditions affecting pricing, terms, and granting access.

“Our study will shed light on whether investments and partnerships pursued by dominant companies risk distorting innovation and undermining fair competition.” – Lina M. Khan, FTC Chair

Microsoft and OpenAI

Microsoft, valued at $3 trillion, has invested $10 billion in OpenAI and both companies are now in their “third phase” of collaboration. Microsoft serves as OpenAI’s exclusive cloud provider and has pledged increased investment in specialized supercomputing systems to accelerate OpenAI’s AI research. Microsoft is deploying OpenAI’s models across its products, introducing new categories of digital experiences built on OpenAI’s technology.

“In this next phase of our partnership, developers and organizations across industries will have access to the best AI infrastructure, models, and toolchain with Azure to build and run their applications.” – Satya Nadella, Microsoft CEO

Anthropic and Amazon

Anthropic has been an AWS customer since its inception, and their collaboration has expanded substantially. Amazon is investing up to $4 billion in Anthropic and will have a minority ownership stake in the company. Anthropic plans to run the majority of its workloads on AWS and utilizes AWS Trainium and Inferentia chips for building, training, and deploying its foundation models. The two companies are also working together on future Trainium and Inferentia capabilities.

“By significantly expanding our partnership, we can unlock new possibilities for organizations of all sizes as they deploy Anthropic’s safe, state-of-the-art AI systems together with AWS’s leading cloud technology.” – Dario Amodei, Anthropic CEO

Anthropic and Google

Anthropic has formed a partnership with Google and Alphabet, Inc. since its founding. Through this collaboration, Anthropic uses Google Cloud security services and deploys Google’s TPU v5e for its Claude large language model (LLM). The company also leverages Google’s PostgreSQL-compatible database AlloyDB and BigQuery data warehouse.

“Our longstanding partnership with Google is founded on a shared commitment to develop AI responsibly and deploy it in a way that benefits society. We look forward to our continued collaboration.” – Dario Amodei, Anthropic CEO

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