FTC Launches Investigation into OpenAI, Anthropic, and Their Cloud Partners

The U.S. Federal Trade Commission (FTC) has initiated an investigation into AI startups OpenAI and Anthropic, focusing on potential anti-competitive effects stemming from their substantial partnerships with tech giants Microsoft, Google, and Amazon. FTC Chair Lina M. Khan emphasized the need to protect new markets and competition as companies aggressively pursue AI development and monetization. “History shows that new technologies can create new markets and healthy competition. We must guard against tactics that foreclose this opportunity,” she stated.

OpenAI benefits from a strategic alliance with Microsoft, which has invested an estimated $13 billion in the company behind ChatGPT. Meanwhile, Anthropic has received significant investments from Amazon, totaling $4 billion, and from Google, amounting to $2 billion. Anthropic primarily utilizes Amazon Web Services (AWS) as its cloud infrastructure. These partnerships grant exclusive access to their AI models to their respective cloud providers, making it crucial to investigate the implications of these agreements on the competitive landscape of generative AI.

The FTC's inquiry aims to gather detailed insights on several key areas, including:

- The specific agreements and strategic reasoning behind the investments or partnerships.

- The practical implications of these collaborations, with a focus on decisions surrounding new product launches, governance or oversight rights, and regular meeting topics.

- Data and analysis concerning the potential competitive impact, which includes evaluating competition levels, prospects for sales growth, and opportunities for product or market expansion.

This investigation comes amid a wider surveillance of AI market dynamics, as the U.K. Competition Authority has also been probing OpenAI's partnership with Microsoft since last December. Their investigation aims to determine if these collaborations create a “relevant merger situation,” which could influence their market operations without an outright merger.

This FTC investigation marks the inaugural scrutiny of Anthropic's practices, contrasting with the heightened attention directed towards OpenAI, which is currently managing multiple legal challenges, including a libel lawsuit in Georgia and a copyright infringement case initiated by The New York Times. In the libel case, OpenAI contends that the output of its chatbot was not published and, thus, cannot constitute libel. Additionally, the company disputes the claims made by The New York Times, asserting it does not require access to the news organization's content for training purposes.

In the evolving landscape of artificial intelligence, these regulatory examinations highlight the importance of maintaining competitive fairness and transparency as new technologies reshape industries. The outcomes of these investigations could set vital precedents for the future of AI and its integration into market practices.