FTC flags Microsoft-OpenAI deal over potential AI market dominance
What's the story
The Federal Trade Commission (FTC) in the US has raised concerns over Microsoft's $13 billion investment in OpenAI.
The agency fears that the deal could extend Microsoft's dominance from the cloud computing sector to the emerging artificial intelligence market.
Similar apprehensions have been raised about Amazon and Google's collaborations with AI firm Anthropic.
Acquisition fears
Warning about tech giants acquiring AI developers
The FTC's report also hints that these partnerships could pave the way for AI developers to be completely acquired by tech giants in the future.
The concern arises from the fact that leading AI start-ups have turned to big tech companies for support to develop expensive and computationally intensive technology.
The agency also warned about the risks of consolidating coveted AI talent around these big firms.
Data concerns
FTC highlights potential data advantages for tech giants
The FTC emphasized how these companies could benefit from advantageous data on chip development, model training, and data center construction.
FTC Chairperson Lina Khan said the report, "Sheds light on how partnerships by big tech firms can create lock-in, deprive startups of key AI inputs, and reveal sensitive information that can undermine fair competition."
Information access
FTC report reveals tech giants' access to confidential information
The FTC report revealed that at least one of the big tech companies accessed "confidential and potentially sensitive financial performance information" as part of its deal with an AI start-up.
This included weekly updates on revenue trends and customer activities.
The report further mentioned that one deal permitted a tech company to use the output from an AI start-up's model, commonly known as "synthetic data," to train its own AI model.
Partnership defense
Microsoft defends its partnership with OpenAI
In response to FTC's concerns, Microsoft's Deputy General Counsel Rima Alaily defended the company's partnership with OpenAI.
She said that this collaboration has allowed one of the most successful AI start-ups in the world and spurred a wave of unprecedented technology investment and innovation in the industry.
This, in turn, has led to the creation of thousands of new start-ups in the US and worldwide.