After $13 bn in Investment, Microsoft's OpenAI Linkage Risks Scrutiny From US, UK Regulators
The US Federal Trade Commission is examining the nature of Microsoft Corp.'s investment in OpenAI Inc. and whether it may violate antitrust laws, according to a person familiar with the matter.
The inquiries are preliminary and the agency hasn't opened a formal investigation, according to the person, who asked not to be named discussing a confidential matter.
Microsoft didn't report the transaction to the agency because the investment in OpenAI doesn't amount to control of the company under US law, the person said. OpenAI is a non-profit and acquisitions of non-corporate entities aren't reported under US merger law, regardless of value. Agency officials are analyzing the situation and assessing what its options are.
An FTC spokesperson declined to comment. Microsoft didn't immediately respond to a request for comment.
The UK's Competition and Markets Authority is also gathering information from stakeholders to determine whether the collaboration between the two firms threatens competition in the UK, home of Google's AI research lab Deepmind. The agency is taking comments until Jan. 3 before making a decision on a formal investigation.
Microsoft has invested some $13 billion in OpenAI and integrated its products into its core businesses, quickly becoming the undisputed leader of AI among big tech firms and forcing Alphabet Inc.'s Google to scramble to catch up.
FTC Chair Lina Khan has been vocal about concerns raised by AI technology and the agency is already scrutinizing some aspects. It has opened a consumer protection probe into into OpenAI, questioning whether its popular ChatGPT conversational AI bot puts consumers' reputations and data at risk.
That probe into the Microsoft-backed startup marked the first official
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