In a significant development, the two leading US antitrust agencies have decided to divide responsibilities concerning the artificial intelligence sector. As per sources familiar with the matter, the Federal Trade Commission (FTC) has been granted the authority to initiate an investigation into Microsoft Corp.’s (NASDAQ:MSFT) association with OpenAI.
Concurrently, the Justice Department will examine whether Nvidia Corp. (NASDAQ:NVDA) has violated antitrust laws. The Justice Department will also maintain oversight over Alphabet Inc.’s Google. These decisions were made following a prolonged negotiation period spanning over six months.
Under the agreed-upon arrangement, each agency has the mandate to investigate the conduct of the respective companies, including recent deals involving them. As part of this, the FTC has initiated an inquiry into whether Microsoft adequately informed the antitrust agencies about its agreement with Inflection AI. In March, Microsoft agreed to a $650 million deal to license Inflection AI’s AI software and onboard a significant portion of its workforce.
Both the DOJ and the FTC declined to provide comments on the matter. Representatives for Microsoft, Inflection, OpenAI, Google, and Nvidia refrained from offering immediate responses.
The Justice Department and the FTC collaborate in enforcing US antitrust laws and coordinate investigations into mergers and anticompetitive behavior through an internal clearance process. Past instances, such as those involving Google, have triggered contentious clearance disputes between the agencies.
While the European Union contemplated a formal inquiry into Microsoft’s investment in OpenAI, it ultimately decided against it. Similarly, the UK’s competition watchdog announced its intention to scrutinize the partnership but concluded last month that Microsoft’s deal with French AI company Mistral AI did not warrant an investigation.
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