Sam Altman – Credit Chen Galili
Sam Altman’s OpenAI is in trouble, or at least its investors may be. The Federal Trade Commission (FTC) opened an investigation into possible antitrust violations about large investments made in OpenAI by five companies, including Microsoft, Amazon and Google, requiring them to provide information regarding recent investments and partnerships involving generative AI companies and major cloud service providers.
The question here that needs to be answered is to what extent can preexisting large and successful companies invest and foster startups? At one point does their “seeding” of new firms cross the line into monopolistic practices?
In the case of OpenAI, however, the different major firms who invested in its aI development may ostensibly be competitors, but each one, from Google to Microsoft, has its own reasons for wanting to develop this tech.
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“History shows that new technologies can create new markets and healthy competition. As companies race to develop and monetize AI, we must guard against tactics that foreclose this opportunity, “said FTC Chair Lina M. Khan. “Our study will shed light on whether investments and partnerships pursued by dominant companies risk distorting innovation and undermining fair competition.”
Rima Alaily, a lawyer who represents Microsoft, defended companies like hers investing large sums in firms like OpenAI saying, “The United States has assumed a global A.I. leadership position because important American companies are working together.”
“Partnerships between independent companies like Microsoft and OpenAI, as well as among many others, are promoting competition and accelerating innovation. We look forward to providing the FTC with the information it needs to complete its study.
A Google spokesperson responded to the news in a statement saying,
“We hope the FTC’s study will shine a bright light on companies that don’t offer the openness of Google Cloud or have a long history of locking-in customers — and who are bringing that same approach to AI services.”
The FTC’, for its part, said its inquiry will “help the agency deepen enforcers understanding of the investments and partnerships formed between generative AI developers and cloud service providers.”
The companies in question will have 45 days from the date they receive the order to respond. The FTC voted 3-0 to conduct the study of AI investments and partnerships.
Now, let’s see what they come up with about such investments in Sam Altman’s OpenAI.
