The FTC is reportedly looking into Microsoft’s $13 billion OpenAI investment

The UK’s Competition and Markets Authority has shared similar sentiments.

Chip Somodevilla via Getty Images
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

OpenAI’s recent drama hasn’t only caught UK regulators’ attention. Bloomberg reported Friday that the Federal Trade Commission (FTC) is looking into Microsoft’s investment in the Sam Altman-led company and whether it violates US antitrust laws. FTC Chair Lina Khan wrote in a New York Times op-ed earlier this year that “the expanding adoption of AI risks further locking in the market dominance of large incumbent technology firms.”

Bloomberg’s report stresses that the FTC inquiry is preliminary, and the agency hasn’t opened a formal investigation. But Khan and company are reportedly “analyzing the situation and assessing what its options are.” One complicating factor for regulation is that OpenAI is a non-profit, and transactions involving non-corporate entities aren’t required by law to be reported.

In addition, Microsoft’s $13 billion investment doesn’t technically give it control over OpenAI in the eyes of the law, another factor in determining what action a governmental agency might be able to take. However, the recent ousting and re-hiring of Altman — and the integral role Microsoft played in reverting those chess pieces to its preferred positions — suggests the lack of control over the nonprofit is more a technicality than the relationship’s underlying essence.

SAN FRANCISCO, CALIFORNIA - NOVEMBER 06: Microsoft CEO Satya Nadella (R) speaks as OpenAI CEO Sam Altman (L) looks on during the OpenAI DevDay event on November 06, 2023 in San Francisco, California. Altman delivered the keynote address at the first ever Open AI DevDay conference. (Photo by Justin Sullivan/Getty Images)
OpenAI CEO Sam Altman (left) and Microsoft CEO Satya Nadella (Justin Sullivan via Getty Images)

The UK’s Competition and Markets Authority (CMA) wrote earlier today that it’s considering investigating the relationship between AI’s two dominant players. It said it’s weighing “recent developments,” referring obliquely to the Altman-Microsoft drama. “The CMA will review whether the partnership has resulted in an acquisition of control — that is, where it results in one party having material influence, de facto control or more than 50% of the voting rights over another entity,” the CMA wrote in its news release.

Khan, also challenging Microsoft’s $69 billion Activision Blizzard acquisition, has previously sounded the alarm about the need for AI regulations.

“As these technologies evolve, we are committed to doing our part to uphold America’s longstanding tradition of maintaining the open, fair and competitive markets that have underpinned both breakthrough innovations and our nation’s economic success — without tolerating business models or practices involving the mass exploitation of their users,” the youngest-ever FTC chair wrote in May. “Although these tools are novel, they are not exempt from existing rules, and the F.T.C. will vigorously enforce the laws we are charged with administering, even in this new market.”