US FTC Launches Investigation Into Tech Giants’ AI Influence – Source: www.databreachtoday.com

Artificial Intelligence & Machine Learning
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Next-Generation Technologies & Secure Development

Chair Lina Khan Says Probe Will Look for Potential ‘Undue Influence’

Chris Riotta (@chrisriotta) •
January 25, 2024    

The U.S. Federal Trade Commission will investigate American technology giants to see whether they exert undue influence over the generative artificial intelligence sector.

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The agency sent letters to Google parent Alphabet, Amazon, Anthropic, Microsoft and OpenAI demanding documentation concerning matters such as exclusive partnerships, privileged access to products and services, or the ability to limit the pricing of another company. The agency invoked Clause 6(b) of its founding statue, which authorizes it to issue the rough equivalent of a subpoena to private companies.

FTC Chairwoman Lina Khan said the commission wants information about “the investments and partnerships being formed between AI developers and major cloud service providers” to understand “whether these ties enable dominant firms to exert undue influence or gain privileged access in ways that undermine fair competition across layers of the AI stack.”

The announcement puts the antitrust agency on par with its British and European counterparts, which over the past two months have announced their own inquiries. The European Commission earlier this month released a request for comment on the state of competition in generative artificial intelligence and said it “is checking whether Microsoft’s investment in OpenAI might be reviewable under the EU Merger Regulation” (see: EU Commission Examines OpenAI, Microsoft Relationship).

The British antitrust authority announced a preliminary review of Microsoft’s interest in OpenAI in December (see: UK Market Regulator Reviews Microsoft’s Interest in OpenAI).

A triggering moment for many of these inquiries was Microsoft’s role in restoring OpenAI CEO Sam Altman to his position leading the venture after a brief ouster in November. The incident concluded with Microsoft also obtaining a nonvoting seat on the OpenAI board – and highlighted the deep nature of the connection between the two companies.

Microsoft has pledged $13 billion to the generative AI model maker and is embedding OpenAI’s generative AI ChatGPT model as Copilot into its Office productivity suite. Earlier this month, Microsoft said it will include a Copilot key on Windows 11 PC keyboards, a rare alternative to the standard keyboard that the company touted as a “transformative moment.”

In a press release issued shortly after the Khan’s remarks, made during a half-day event examining the rapidly developing technology, the FTC said major tech companies are “pursuing partnerships and direct investments with AI developers to get access to key technologies and inputs needed for AI development.”

The FTC is also seeking information about arrangements for access to cloud computing, including any discussion about contractual restrictions.

“We are squarely focused on how business models drive incentives,” Khan said. “The FTC’s work has made clear that these business incentives cannot justify violations of the law.”

The companies did not immediately respond to requests for comment.