Dominant AI players Nvidia, Microsoft, OpenAI face US antitrust inquiries

Hmm... world's most valuable companies furthest ahead with world's most coveted tech. WCGW?

Microsoft, OpenAI, and Nvidia are set to be investigated for potential antitrust violations with regard to their dominant positions in the burgeoning AI industry, according to reports.

An agreement is said to have been reached whereby the US Department of Justice (DoJ) will take the lead on looking into the behavior of GPU giant Nvidia, while the Federal Trade Commission (FTC) is to carry out a similar probe into generative AI developer OpenAI and its relationship with Microsoft, or so says The New York Times.

The FTC and the DoJ declined to comment.

All three companies have been riding the wave of interest and investment in AI over the past several years, especially since OpenAI unleashed ChatGPT onto the world towards the end of 2022.

Microsoft, which is a key investor in OpenAI, is currently the world's most valuable company, with an estimated worth of $3.15 trillion, while Nvidia is now in second place with a valuation of $3.012 trillion, driven by huge demand for its AI accelerator hardware.

The issue with Microsoft is that it has sunk a huge amount of money into OpenAI – said to total as much as $13 billion – as well as making deals with other AI companies. The investigation will consider if this relationship gives the pair an unfair advantage, particularly around the technology for large language models such as ChatGPT.

Microsoft CEO Satya Nadella

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Nvidia dominates the GPU market with an estimated 80 percent share, according to some figures, although it is starting to face more competition from rivals such as Intel and AMD. That alone leaves the company open to claims it is a monopoly, especially as many of its software tools work only with its own GPUs.

According to news site Politico, the agreement between the DoJ and FTC over the investigations has been negotiated for nearly a year, as the two agencies share antitrust enforcement in the US but must clear any investigation with their counterpart first.

Both agencies said it was vital to ensuring that the rapidly growing artificial intelligence market was not dominated by the existing tech giants, but an agreement was needed before work could begin.

The FTC has also opened another investigation into whether a $650 million deal between Microsoft and another AI outfit, Inflection AI, may have been structured to avoid scrutiny from regulators while effectively being an acquisition.

As reported by The Register in April, Microsoft created an AI division headed by Mustafa Suleyman and Karén Simonyan, founders of InflectionAI, then much of the company's workforce transferred to the Redmond giant and it also got the right to use Inflection's models as part of the deal.

The move is said to have also attracted the attention of regulators in the European Union, who are already looking into Microsoft's investment in OpenAI and another AI operation called Mistral.

According to The New York Times, the moves indicate that regulators are increasingly concerned about the AI industry and are beginning to put it under closer scrutiny. With this and legal action regarding the unauthorized use of copyrighted content in order to train AI models, it looks like the AI industry could be in for a bumpy ride. ®

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