FTC Probes Big Tech’s Influence on Generative AI amid Antitrust Concerns

Summary

  • Generative AI has caught the eye of global regulators and lawmakers due to concerns about its potential misuse for fraud, influence operations, and threats to national security.
  • The Federal Trade Commission (FTC) is monitoring the dealings between major tech corporations like Microsoft, Google, and Amazon along with AI providers, due to the potential violation of antitrust laws.
  • The concentration of AI control and funding among a few corporations is being investigated by the FTC, in particular, the deals involving ChatGPT maker OpenAI.
  • The major funding received by AI companies from tech giants has raised doubts in the venture capital and startup communities.

The Impact of Generative AI

Generative AI, which can fabricate new content like ChatGPT with its data-driven capabilities, has raised the eyebrows of worldwide regulators and legislators. The apprehension arises from the potential misuse of this technology in fraud, sway operations, or even threats to national security.

Antitrust Concerns and the FTC’s Response

The small but powerful circle of dominant players and tech giants have hinted at possible antitrust infringements. Consequently, the FTC’s orders could enable a deeper examination of the arrangements between Microsoft, Google, Amazon, and AI suppliers. This will help the antitrust and consumer protection agency determine the effect of such deals on market competition.

Monitoring Industry Practices

This situation brings attention to the industry, emphasizing the regulatory body’s vigilance and willingness to learn in order to stay ahead of potential issues. As confirmed by ex-FTC chair William Kovacic, if the necessity for future action arises, the FTC will be adequately prepared. Under FTC’s request, companies are required to share the details on their relationships with Big Tech regarding pricing, product and service access, and personnel decisions.

Investigations into AI Funding

A potential concentration of AI control among limited corporations is also on the FTC’s radar. AI funding is heavily dominated by corporate investors like Microsoft and Amazon, contributing to 90% of total generative AI funding in 2023.

Implications for AI Companies

Reports suggest inquiries into OpenAI, the maker of ChatGPT, over potential antitrust violations, especially due to its partnership with Microsoft. It’s not just OpenAI under scrutiny, but also companies like Anthropic that work with large AI models, trained on vast quantities of data, have found themselves in a similar spot.

The significant funding extended by tech giants, sometimes via cloud credits instead of cash, has caused discomfort in the venture and startup circles.

Changes in the AI industry could potentially affect the trading of assets linked to these major tech companies and AI providers. Traders would need to keep a keen eye on these developments and how they could impact the financial markets.

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