FTC Flags Antitrust Risks in Microsoft's $13.75 Billion OpenAI Investment, Citing Potential AI Market Dominance

Jan 17, 2025, 08:26 PM

The Federal Trade Commission (FTC) has raised antitrust concerns regarding Microsoft Corp.'s $13.75 billion investment in OpenAI, according to a report released by the agency. The FTC's findings suggest that Microsoft's partnership with OpenAI, which includes Microsoft being the 'exclusive cloud provider' and collaborating on a supercomputer, could potentially allow the tech giant to extend its dominance in cloud computing into the emerging artificial intelligence (AI) market. The report also scrutinizes similar partnerships between Amazon, with an $8 billion investment, and Google, with a $2.55 billion investment, with AI company Anthropic, highlighting risks that AI developers might be fully acquired by these tech giants in the future. FTC Chair Lina Khan emphasized that such partnerships by big tech firms could create lock-in, deprive startups of essential AI inputs, and reveal sensitive information that could undermine fair competition. The report also notes 'circular spending' where investments are used to pay for cloud services from the investing company. The report stems from an FTC inquiry initiated in January 2024 under its 6(b) authority, focusing on the implications of these partnerships on competition and market dynamics.