DOJ, FTC to Probe OpenAI, Microsoft, Nvidia 

The U.S Department of Justice (DoJ) and the Federal Trade Commission (FTC) have agreed to conduct investigations related to the roles of OpenAI, Microsoft, and Nvidia in the AI industry. 

The agreement between the two agencies was made based on antitrust concerns, highlighting the growing regulatory scrutiny regarding the concentration of power in the field of AI.  

Microsoft and Nvidia are both considered as major players in field, with the latter ranking the world’s second largest company in terms of market value and Nvidia taking the lead on Wednesday, with its market capitalization exceeding $3 trillion, which draws additional attention to its dominance and potential trust implications. 

AI Market Dominance  

Meanwhile, U.S. antitrust regulators have repeatedly expressed their concerns about AI. These include the competitive advantages that such companies are taking, considering their access to a large amount of data for training their AI models. 

Additionally, other concerns are also raised about the impact generative AI is having on the market for creative works. Partnerships made by these companies are also taking part in the investigations, as officials think that big tech companies are using partnerships to bypass required merger review processes. 

This recent agreement between DOJ and the FTC is similar to the one reached in 2019, when both agencies decided to divide enforcement against Meta and Amazon. The DOJ also sued Apple and Google for alleged violations of antitrust laws. 

Partnerships and Investments 

Speaking of partnerships and investments, despite OpenAI being a non-profit organization, Microsoft has made an investment of $13 billion in the company, owning a significant stake of potentially 49%. 

Therefore, and under this deal, the Justice Department will be handling the investigations with Nvidia for possible antitrust violations and the FTC will be focusing on OpenAI and Microsoft, and mainly on the deal made with the AI startup Inflection. 

The agreement was finalized in the past week and is expected to be completed soon, according to sources familiar with the matter. 

Nvidia controls approximately 80% of the AI chips market, in addition to custom AI processors used by cloud computing giants like Google, Microsoft, and Amazon. This market dominance enables Nvidia to achieve gross margins between 70% and 80%. 

Commenting on the regulatory agreement, Microsoft emphasized its commitment to fulfilling legal obligations related to transaction reporting. While Nvidia’s representatives declined to comment. 

The U.S Department of Justice antitrust chief Jonathan Kanter recently expressed concerns about AI’s reliance on vast data and computing power, stating, structures and trends in AI that should give us pause,” adding that such technology leverages a huge amount of data, which is giving big tech giants a great advantage. 

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