Alphabet, Amazon and Microsoft face FTC probe into AI ‘investments and partnerships’

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By Blegug Nan

Alphabet, Amazon and Microsoft face FTC probe into AI ‘investments and partnerships’

The Federal Trade Commission said Thursday it will look closely at the generative-artificial-intelligence investments and partnerships of Alphabet Inc. GOOGL, +1.67% GOOG, +1.74%, Amazon.com, Inc. AMZN, +0.22%, Anthropic PBC, Microsoft Corp. MSFT, +0.56% and OpenAI Inc.

Microsoft owns 49% of OpenAI, while Alphabet has invested in Anthropic.

“History shows that new technologies can create new markets and healthy competition. As companies race to develop and monetize AI, we must guard against tactics that foreclose this opportunity,” FTC Chair Lina Khan said in a statement. “Our study will shed light on whether investments and partnerships pursued by dominant companies risk distorting innovation and undermining fair competition.”

The agency cited section 6(b) of the FTC Act, which allows it to scrutinize corporate partnerships and investments with AI providers and their impact on the competitive landscape.

The study allows the FTC to look into the AI companies separately from its law-enforcement arm and to make civil investigative demands, such as ordering companies to file specific reports and answer questions in writing about their businesses.

Also read: The Sam Altman drama knocked Microsoft’s stock around. So why is its deal with OpenAI largely a secret to Wall Street?

The agency’s inquiry is the latest by federal regulators into the broad reach of Big Tech and its impact on the trillion-dollar tech economy. The FTC has aggressively pursued action against Amazon and Facebook parent Meta Platforms Inc. META, +0.19% while the Justice Department has sued Alphabet and is expected to announce a case against Apple Inc. AAPL, -0.07% as early as March.

At the same time, the U.S. Senate is holding forums with AI leaders on the responsible growth of the technology and its implications for jobs, hiring practices, and the overall national economy.

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