Microsoft's $13B OpenAI Deal Sparks Preliminary Probe By FTC And UK Regulators
The investments Microsoft is making into OpenAI are not going unnoticed by the United States Federal Trade Commission, with the regulatory body performing preliminary inquiries according to a source familiar with the matter. However, it’s important to note that a formal investigation has not been opened by the agency.
The United States isn’t the only country where Microsoft is receiving scrutiny over its partnership with Open AI. The Competition and Markets Authority in the UK is also looking into the matter, and will be open to comments from stakeholders until January 3rd. After this point the agency will decide whether or not a more formal investigation of its own will be necessary.
Microsoft is bullish on OpenAI, investing $13 billion into the company so far. It has also integrated OpenAI’s technologies into its products. However, these investments were not reported to the FTC. This is because it did not lead to Microsoft having control over OpenAI, and OpenAi’s status as a non-profit organization means that these types of transactions do not have to be reported.
Leadership at the FTC will still want to take a closer look at the partnership because of how quickly AI has become a key offering by technology firms. Lina Khan, chair of the FTC, has already made it known that the agency will “need to be vigilant early” in regard to AI. A consumer protection probe into OpenAI’s ChatGPT is already under way.
These two inquiries could potentially be a big problem for Microsoft, depending on how things work out. If they turn into more formal investigations it might mean that regulators in other parts of the world will also jump in, possibly hindering the tech giant’s AI aspirations. That said, it wouldn't necessarily be an endgame for Microsoft, as we saw with its ultimately successful acquisition of Activision Blizzard.