US antitrust watchdogs to investigate Microsoft, OpenAI, and Nvidia over AI dominance

The artificial intelligence (AI) landscape is heating up, not just with innovation, but also with regulatory scrutiny. The US Department of Justice (DoJ) and the Federal Trade Commission (FTC) have reportedly reached an agreement to investigate the dominant roles that Microsoft, OpenAI, and Nvidia play in the AI industry.

This move comes amidst growing concerns over potential anti-competitive practices within the rapidly evolving field of AI. The three companies hold significant sway in different sectors of AI development:

Microsoft: Was already a tech giant but its $13 billion investment in OpenAI gives it more control over the AI sector.

OpenAI: Started the AI revolution with the launch of ChatGPT and has only been growing more powerful ever since.

Nvidia: A leader in the development of Graphics Processing Units (GPUs) crucial for running complex AI algorithms. Currently holds about 80% of the AI chip market.

The DoJ is expected to take the lead in investigating Nvidia, focusing on whether their dominance in the AI chip market stifles competition. Meanwhile, the FTC will reportedly examine the conduct of both Microsoft and OpenAI, particularly how their close partnership might influence the overall AI landscape.

The Wall Street Journal also reported that the FTC is investigating whether Microsoft structured a recent deal with startup Inflection AI to avoid an antitrust inquiry. In March, Microsoft hired Inflection’s CEO and co-founder, UK entrepreneur Mustafa Suleyman, as the boss of a new AI division and agreed to pay his company $650m (£508m) to license its AI software.

This investigation follows a year of negotiations between the DoJ and FTC, highlighting the complexities of regulating an industry where innovation and collaboration are key drivers.

Some experts believe the scrutiny will help achieve more transparency as regulators might push for clearer practices regarding data access and how AI algorithms function. Depending on the findings, the investigation might also lead to limitations of the three companies' influence and pave the way for new players in the AI chip and research space.

The ultimate impact of the investigation remains to be seen. However, it signifies a growing recognition by US regulators of the need to ensure a fair and competitive playing field in the rapidly growing AI sector.