Technology giants He is passionate about investing in artificial intelligence.Spending billions of dollars I invest, From poachingand I eat it all up A small and medium-sized enterprise developing global AI technology.
Amazon is $4 billion invested in AI startup Anthropik Apple uses its technology Canadian startup DarwinAI Earlier this year, the company Quiet AI takeoverMicrosoft entered into a bizarre “buy-and-hire” deal with startup Inflexion, paying a $650 million “license fee” to hire CEO Mustafa Suleiman and most of his staff.
These companies join just a few others dominating the AI field: Nvidia dominates the market for data center chips that run AI software, while OpenAI leads the AI chatbot space.
But this monopoly party may not last long. The Department of Justice and the Federal Trade Commission Microsoft, Nvidia sign deal to explore OpenAI According to The New York Times, a lawsuit has been filed over potentially anti-competitive practices in the AI field. The FTC is investigating Microsoft separately. Regarding inflation trading.
“We feel very strongly that an investigation into this matter is warranted, and whether or not a lawsuit is filed, the investigation is going to have a significant effect,” Barry Barnett, an antitrust attorney at the law firm Susman Godfrey, told Quartz in an interview. “What the Antitrust Division and the FTC's Bureau of Competition are concerned about is that these giant companies with huge amounts of money are going to build a moat, and they want to get ahead of that.”
Nvidia declined to comment, while Microsoft told Quartz it takes its legal obligations seriously and is “confident that it complies with its obligations.” OpenAI did not immediately respond to a request for comment.
Tech companies are already under increasing scrutiny from U.S. antitrust regulators. The Justice Department said in March A major antitrust lawsuit against Apple It is suspected of monopolizing the smartphone market. of The Department of Justice and Google have delivered closing arguments in what could be a historic antitrust trial. This month, as part of a four-year lawsuit accusing Google of monopolizing the search engine market, Another lawsuit from the Department of Justice The FTC has accused the company of anticompetitive conduct in another market: digital advertising. Lawsuit against Amazon and Facebook The companies focus on their respective strengths in online retail and personal social networking.
Dirk Auer, director of competition policy at the Center for International Law and Economics, said antitrust regulators are taking preemptive action in the AI space because they regret not getting involved sooner in regulating the big internet companies, saying cracking down on tech giants like Google and Amazon sooner would have led to more competition in search, online retail and smartphones.
The FTC and DOJ investigations into Microsoft, OpenAI, and Nvidia could lead to lawsuits against the AI giants, but experts say such lawsuits may not necessarily be successful.
Experts believe regulators' legal tools are weak
While regulators are accusing Nvidia, Microsoft, and OpenAI of alleged anti-competitive behavior in the same market (AI), the companies themselves are very different: Nvidia is a hardware provider, Microsoft is a large tech company with a capital B, and OpenAI is a startup. These differences will likely see regulators take separate action against the companies (if they do at all).
Auer said the case against Nvidia would likely focus on its internal business practices, like bundling AI chips with services and giving kickbacks to customers, while the case against Microsoft and OpenAI would focus on how its deals with other companies have consolidated the AI industry.
Auer said OpenAI and Microsoft “are the epitome of what antitrust authorities are concerned about,” including large incumbent platforms like Microsoft entering into deals with AI startups like OpenAI, “essentially protecting their market position and then gaining control over those AI startups and thus expanding their control.” [over] “It's AI,” Auer said.
Auer believes regulators will have a relatively weak case against OpenAI. OpenAI did not respond to a request for comment, but Auer believes the company will argue that while it is competing hard with rivals, the AI market is still too emerging for any one company to dominate.
“To the extent that's the case, I don't think there's much of an antitrust issue,” Auer said.
What does this case mean for the U.S. AI market and its consumers?
Auer said NVIDIA, Microsoft and OpenAI would have to devote significant resources to compliance rather than developing the latest and greatest AI products. This could benefit the AI market by allowing competitors to catch up with their dominant market positions. But increased government scrutiny of technology and AI could mean those very competitors are at risk of coming under fire from regulators, stifling innovation.
Regulatory scrutiny could be especially hard on AI startups like OpenAI that don't have the cash flow to do so, forcing them to hire compliance teams rather than dedicating resources to quickly developing profitable products.
Barnett said consumers should know that the research is a “good thing” for them, and that it could help AI companies with fewer resources compete, innovate, and offer consumers a wider range of AI tool choices, which could give consumers more choice and reduce overall costs.
Others see big tech AI deals as a driver of innovation and regulatory oversight as a hindrance. For example, former FTC general counsel Alden Abbott said in a statement that the partnership between small and large companies “should be celebrated.”
“Such competition tends to accelerate innovation and bring new and better technologies to the market. [the] “The AI sector benefits American consumers and technological advancement,” he added. “Preventing small businesses from partnering with larger companies could slow innovation and improve consumer welfare.”
