U.S. regulatory authorities are launching a sweeping antitrust action targeting three major players in the artificial intelligence industry. Reports on Wednesday indicated that regulators have agreed to proceed with antitrust investigations into the dominant positions of Microsoft, OpenAI, and Nvidia.
Two sources familiar with the matter revealed that the U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC) reached a preliminary agreement last week, with expectations to finalize it in the coming days.
The DOJ will lead the investigation into Nvidia, the world's largest chip manufacturer, for potential antitrust violations. Meanwhile, the FTC will oversee antitrust inquiries into OpenAI and Microsoft.
This move signals the most robust indication yet that U.S. regulators are intensifying their scrutiny of antitrust issues within the rapidly evolving AI sector.
Regulators recently expressed their intention to proactively regulate AI development. Last July, the FTC began investigating whether OpenAI's data collection practices might harm consumers.
In January, the FTC expanded its oversight to scrutinize strategic partnerships between tech giants and AI startups, including Microsoft's significant investment in OpenAI and collaborations between Google, Amazon, and Anthropic.
Interestingly, Microsoft's partnership with AI unicorn Inflection has also drawn FTC attention. In this arrangement, Microsoft did not acquire Inflection outright but instead poached nearly all of its employees, from founders to engineers. Microsoft also agreed to pay around $650 million for licensing Inflection's technology.
On Thursday, reports emerged that the FTC launched an investigation to determine whether Microsoft circumvented government antitrust reviews while gaining control of Inflection. The FTC has requested documents from both parties covering approximately two years.
Under antitrust regulations, any acquisition valued at over $119 million must be reported to federal antitrust enforcement agencies, which can then choose to investigate the transaction's impact on market competition. If such an investigation finds that the deal could lead to monopolistic practices, the FTC or DOJ can sue to block the acquisition.
If the FTC determines that Microsoft intentionally avoided antitrust scrutiny, it could sue the tech giant, seeking fines and demanding that Microsoft halt the transaction pending a thorough FTC investigation.