FTC wants Microsoft's relationship with OpenAI under the microscope
Hey Bing, how can I invest billions in a company but not break antitrust laws?
Microsoft's OpenAI headaches might not be going away following reports that now the US Federal Trade Commission (FTC) is considering an investigation into the Windows giant's investment in the company.
At question, should the FTC opt to open a formal examination, is whether any antitrust rules have been broken. Despite the money poured into it over the years, OpenAI was founded as a non-profit in 2015, and Microsoft's investment does not amount to control of the company.
Microsoft chief communications officer Frank X Shaw underlined attempts to dampen down industry talk of a probe: "While details of our agreement remain confidential, it is important to note that Microsoft does not own any portion of OpenAI and is simply entitled to share of profit distributions."
The Register contacted the FTC for its view on the reports and will update should we receive a response.
Microsoft has invested upwards of $10 billion in OpenAI to fund the computing power needed to train AI models. To see a return, Microsoft is shoehorning ChatGPT into every corner of its portfolio. However, the recent departure and subsequent return of OpenAI boss Sam Altman rattled execs in Microsoft HQ.
As such, the Windows vendor parachuted a non-voting observer into OpenAI's board.
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At the end of last week, the UK's Competition and Markets Authority (CMA) launched a consultation to ask interested parties to comment on Microsoft's relationship with ChatGPT developer, and if it could be construed as a merger that potentially skews competition.
If so, the CMA will itself launch an official inspection.
The FTC has already begun investigating OpenAI's ChatGPT over privacy and reputational concerns. It is also no stranger to Microsoft. Despite the company's $69 billion deal to buy Activision Blizzard seemingly going ahead in October, the FTC has continued its attempts to undo the merger.
In October, the UK's CMA gave Microsoft's $69 billion buy of Activision Blizzard the green light but criticized the tactics employed by Microsoft to push through the deal.
"Businesses and their advisors should be in no doubt that the tactics employed by Microsoft are no way to engage with the CMA," said the regulator's CEO, Sarah Cardell. ®