Startups

US regulator probes AI investments by tech giants – WION


A top US antitrust regulator on Thursday said it was probing investments made by Microsoft, Google and Amazon into generative AI startups OpenAI and Anthropic. The move is part of efforts by authorities to make sure regulatory oversight can keep up with developments in artificial intelligence and stop major players shutting out competitors in a field promising upheaval in multiple sectors.

COMMERCIAL BREAK

SCROLL TO CONTINUE READING

“Our study will shed light on whether investments and partnerships pursued by dominant companies risk distorting innovation and undermining fair competition,” said Lina Khan, head of the Federal Trade Commission (FTC), in a statement.

One major concern is that generative AI, which allows for human-level content to be produced by software in just seconds, requires a massive amount of computing power, something that big tech companies are almost uniquely capable of delivering.

Amazon — through its Amazon Web Services (AWS) arm — Microsoft and Google are the world’s biggest providers of cloud-based data centers, which store and process data on a vast scale, in addition to being some of the world’s richest companies.

Microsoft has moved the fastest in the generative AI revolution with a reported $13 billion investment into OpenAI, the creator of ChatGPT.

And after a boardroom fight that saw OpenAI chief executive Sam Altman temporarily sidelined, Microsoft now holds a non-voting seat on the company’s board.

Anthropic, founded by former staff of OpenAI, received major investments from both Google and Amazon last year and is seen as a potential major player in the fast-emerging generative AI sector.

Amazon had already announced it aimed to soup up its Alexa voice assistant with generative AI, which the firm said would allow users to have smoother conversations with the device.

Anthropic also agreed to use Amazon’s chips to develop its next models and the two firms said they would collaborate on developing a next generation of AI chips.

The startup also agreed to use Amazon’s cloud infrastructure.

Such cooperation is what the FTC will be taking a closer look at.

With regulators in Britain, the European Union “and now the FTC investigating, the walls are quickly closing in on these so-called AI ‘partnerships’ — better described as acquisitions in all but name,” said Max von Thun, Europe Director for Open Markets, an anti-monopoly activist group.

‘House of horrors’

FTC studies are intended to gain a “deeper understanding of market trends and business practices” and any conclusions can guide the commission toward taking legal action, the regulator said.

In a statement, Microsoft Vice President Rima Alaily said it would provide the FTC with the information it requests. 

“Partnerships between independent companies like Microsoft and OpenAI, as well as among many others, are promoting competition and accelerating innovation,” she added. 

Google said it hoped the FTC “will shine a bright light on companies that don’t offer the openness of Google Cloud or have a long history of locking-in customers — and who are bringing that same approach to AI services.”

This seemed to be a veiled swipe at Microsoft and its close partnership with OpenAI that gives Microsoft exclusive access to OpenAI’s industry-leading technology and profits until its investment is recouped.

Anthropic and Amazon declined to comment. 

Khan, a former antitrust academic, has targeted big tech since taking office in 2021 but has yet to score any major victories.

This summer, for example, the FTC had to suspend its proceedings to block Microsoft’s acquisition of Activision Blizzard, the video game giant, after a judge threw out the commission’s bid.

The FTC launched a major case against Amazon in September, for allegedly making it harder for small businesses to compete on its platform.

The European Commission, the EU’s executive arm, earlier this month started its own preliminary study of Microsoft’s multibillion-dollar investment in OpenAI to see if it could be a disguised merger.

Britain’s competition watchdog launched a similar case in December.

“Artificial intelligence has the potential to become antitrust’s house of horrors if we do nothing,” said Benoit Coeure, chairman of the French Competition Authority, in November.



READ SOURCE