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FTC Launches Investigation into Tech Giants' AI Partnerships and Investments

The FTC is investigating major tech companies, including Amazon, Google, Microsoft, Anthropic, and OpenAI, regarding their AI investments and partnerships, focusing on their competitive impact and strategic implications.

The Federal Trade Commission (FTC) has initiated an investigation into large tech companies, including Amazon, Alphabet (Google), Microsoft, Anthropic, and OpenAI, regarding their investments and partnerships in the field of artificial intelligence (AI). The FTC has issued orders to these companies, requiring them to provide information about their agreements with generative AI firms and major cloud service providers, as well as the strategic reasoning behind these agreements.

This investigation is part of a market inquiry into the investments and partnerships between AI developers and major cloud service providers. Businesses have been forming partnerships and making direct investments in AI developers to gain access to essential technologies and inputs required for AI development.

The FTC will conduct a 6(b) study, which allows the agency to investigate AI companies independently of its law enforcement division. This study enables the FTC to issue civil investigative demands, compelling companies to provide specific reports and respond to inquiries about their operations.

The focus of the investigation includes assessing the impact of these partnerships on competition for AI inputs and resources, as well as the competitive dynamics related to essential products and services necessary for generative AI. Additionally, the FTC is interested in any information shared with other government entities, including foreign government entities, related to investigations or inquiries on these topics.

Notably, the UK's antitrust authority is also considering launching an inquiry into Microsoft's significant collaboration with OpenAI, and the European Commission has signaled its intent to investigate whether Microsoft's investment in OpenAI falls under the EU Merger Regulation.