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In a significant move regarding generative AI, the Federal Trade Commission (FTC) has begun inquiries into five major AI technology creators. The FTC has issued orders to Amazon, Microsoft, OpenAI, Anthropic, and Alphabet, asking them to provide details about their recent multi-billion-dollar investments and partnerships. This investigation aims to understand how these relationships impact the competitive landscape.
These companies have 45 days to respond. The FTC acted swiftly after raising concerns about AI competition last June. FTC Chair Lina M. Khan emphasized the importance of fostering healthy competition in new markets created by emerging technologies like AI. She stressed the need to guard against strategies that could limit this potential.
In response, Microsoft’s corporate VP for competition and market regulation, Rima Alaily, highlighted the importance of partnerships between American companies in maintaining the U.S.’s global AI leadership. Alaily stated that collaborations, such as those between Microsoft and OpenAI, are fostering competition and accelerating innovation. Microsoft looks forward to assisting the FTC with its investigation.
The FTC’s orders focus on recent multi-billion-dollar investments, including:
– Microsoft and OpenAI’s partnership announced on January 23, 2023.
– Amazon and Anthropic’s collaboration announced on September 25, 2023.
– Google’s expanded partnership with Anthropic announced on November 8, 2023.
The FTC is seeking information on:
– Agreements and strategic reasons behind these investments and partnerships.
– The implications of these investments, including decisions on new product releases, governance, oversight, and joint meetings.
– Analysis of the competitive impact, market share, competitors, and potential for market expansion.
– Competition for AI inputs and resources, and the dynamics around essential products and services for generative AI.
– Information on any government investigations or requests for information related to these companies.
The companies must also provide documents on interactions and influence in decision-making, such as product discontinuation, personnel decisions, and reports on the transactions. They need to detail any agreements about inclusivity or privileged access and conditions on pricing or access terms.
Khan stated that the study aims to determine if these investments and partnerships by dominant companies are distorting innovation and undermining fair competition.
Microsoft, which recently reached a $3 trillion valuation, has invested $10 billion in OpenAI. They are now in the “third phase” of their collaboration, with Microsoft as OpenAI’s exclusive cloud provider. Microsoft has committed to increasing investment in specialized supercomputing systems to support OpenAI’s research. Additionally, Microsoft is integrating OpenAI’s models across its products, including the Azure OpenAI Service.
Amazon is investing up to $4 billion in Anthropic and will hold a minority stake in the company. AWS is Anthropic’s primary cloud provider, and the majority of Anthropic’s workloads will run on AWS. Anthropic is also using AWS Trainium and Inferentia chips to develop its models. The partnership includes providing AWS customers with future generations of Anthropic’s models via Amazon Bedrock and offering early access to unique features for model customization.
Google has partnered with Anthropic since its founding in 2021. Anthropic uses Google Cloud security services and deploys Google’s TPU v5e for its Claude large language model. They also use Google’s AlloyDB for handling transactional data and BigQuery for data warehousing. This partnership is based on a shared commitment to develop AI responsibly and make reliable and interpretable AI systems available to businesses globally.