In a groundbreaking move regarding generative AI, the Federal Trade Commission (FTC) has initiated inquiries into five leading technology firms: Amazon, Microsoft, OpenAI, Anthropic, and Alphabet.
The FTC has issued orders requiring these companies to disclose information related to their recent multi-billion-dollar investments and partnerships. The aim is to "scrutinize" these relationships to better understand their effects on market competition. The companies must respond within 45 days.
This inquiry follows the FTC's concerns about generative AI competition raised last June. “History shows that new technologies can create new markets and healthy competition,” stated FTC Chair Lina M. Khan. “As companies strive to develop and monetize AI, we must safeguard against practices that could stifle opportunity.”
In a statement responding to the investigation, Microsoft’s Rima Alaily, corporate VP for competition and market regulation, remarked: “The U.S. holds a global leadership position in AI due to collaboration among major companies. Our partnerships with entities like OpenAI foster competition and innovation. We are committed to providing the FTC with the necessary information for their study.”
The inquiry particularly focuses on three major multi-billion-dollar partnerships:
- Microsoft and OpenAI’s extended partnership announced on January 23, 2023
- Amazon and Anthropic’s strategic collaboration announced on September 25, 2023
- Google’s expanded AI partnership with Anthropic, announced on November 8, 2023
Key areas the FTC is reviewing include:
- The agreements and strategic rationale behind these investments and partnerships
- Implications for new product releases, governance, and oversight
- Analysis of their competitive impact, including market share and growth potential
- Competitive dynamics around AI inputs and resources
- Any related inquiries from government entities, including foreign governments
The firms must provide extensive documentation on their decision-making interactions, analyses, reports, and any agreements that may influence pricing or access.
“Our study will clarify whether partnerships and investments by dominant companies risk hindering innovation and fair competition,” Khan added.
Microsoft-OpenAI Partnership
Microsoft, now valued at $3 trillion, has invested approximately $10 billion in OpenAI, embarking on what they call the "third phase" of their partnership. Microsoft serves as OpenAI’s exclusive cloud provider and plans to enhance investments in specialized supercomputing systems to support OpenAI’s independent AI research.
Microsoft will integrate OpenAI’s models across its product suite and introduce innovative digital experiences built on this technology, including its Azure OpenAI Service. Microsoft Chairman and CEO Satya Nadella emphasized, “In this next phase, developers and organizations will access the best AI infrastructure and tooling via Azure for application development.”
Amazon’s $4B Investment in Anthropic
Anthropic, a long-time AWS customer, has received a substantial investment of up to $4 billion from Amazon, resulting in Amazon holding a minority stake. AWS will be Anthropic's primary cloud provider, with the company aiming to utilize AWS Trainium and Inferentia chips for AI model training and deployment. They have committed to providing future foundation model generations to AWS customers via Amazon Bedrock.
Anthropic co-founder and CEO Dario Amodei noted, “By significantly expanding our partnership, we can unlock new opportunities for organizations to deploy Anthropic’s advanced AI systems in conjunction with AWS technology.”
Google and Anthropic: Developing Steerable AI
Google and its parent company, Alphabet Inc., have collaborated with Anthropic since its inception in 2021, utilizing Google Cloud security services for AI development. Anthropic employs Google’s TPU v5e for its Claude large language model and utilizes AlloyDB and BigQuery for data management.
Amodei affirmed, “Our long-standing partnership with Google reflects a commitment to developing AI responsibly, ensuring that it benefits society. We look forward to enhancing our collaboration to make steerable, reliable AI systems accessible to businesses globally.”
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