The Federal Trade Commission (FTC) and Department of Justice (DOJ) are beginning an investigation into multiple AI companies, alleging that Microsoft, OpenAI, and Nvidia may be in violation of antitrust law, the New York Times reported on Wednesday.
The investigation will primarily look at the companies’ conduct rather than their mergers and acquisitions, with the DOJ leading the probe into Nvidia and the FTC investigating Microsoft and OpenAI.
On Tuesday, former and current employees working on AI development at Google and OpenAI released an open letter calling for more open dialogue and for companies to refrain from retaliating against whistleblowers.
While it is yet to be determined if any laws have been violated, federal authorities will likely examine potential breaches of the Sherman Antitrust Act (1890), the Federal Trade Commission Act (1914), and/or the Robinson-Patman Act (1936). These laws prohibit monopolistic practices, unfair competition, deceptive practices, and discriminatory pricing practices in commerce. Essentially, the laws aim to prevent big companies from using unfair methods to dominate a market, cheat customers, or harm competitors.
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Many AI experts and outside observers have noted the incredible disruptive potential of AI technology and warned of the dangers of potential monopoly powers in AI. In November of last year, Open Markets Institute issued a 59-page report titled “AI in the Public Interest: Confronting their Monopoly Threat.” The report highlighted how a monopoly in AI technology could exacerbate “many of the worst problems of the digital age.”
The report clarified:
These problems include the spread of misinformation and distortion of political debate, the decline of news and journalism, the undermining of compensation for creative work, exploitation of workers and consumers, monopolistic abuse of smaller businesses and challengers, amplified surveillance advertising and online addiction, and the threat to resilience and security from extreme concentration.
The three companies being investigated have a combined market value of around $6.1 trillion as of Thursday.
Nvidia is the world’s leading manufacturer of graphics processing units (GPUs), which are essential for the computing power needed for AI. Though OpenAI and Microsoft have a dramatic history, they plan to build a $100 billion dollar supercomputer named “Stargate” together. The precise details of the commercial relationship between the three companies remain shrouded in corporate secrecy but may be exposed to the public by the government investigation.
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