US Sets Stage for Antitrust Probes Into Microsoft, OpenAI and Nvidia
upstart writes:
The U.S. Justice Department and the Federal Trade Commission have reached a deal that clears the way for potential antitrust investigations into the dominant roles that Microsoft (MSFT.O), OpenAI and Nvidia (NVDA.O) , play in the artificial intelligence industry, according to a source familiar with the matter.
The agreement between the two agencies shows regulatory scrutiny is gathering steam amid concerns over concentration in the industries that make up AI. Microsoft and Nvidia not only dominate their industries but are also the world's two biggest companies by market capitalization.
The move to divvy up the industry mirrors a similar agreement between the two agencies in 2019 to divide enforcement against Big Tech, which ultimately saw the FTC bring cases against Meta (META.O) and Amazon (AMZN.O), and the DOJ sue Apple (AAPL.O) and Google (GOOGL.O) for alleged violations. Those cases are ongoing and the companies have denied wrongdoing.
While OpenAI's parent is a nonprofit, Microsoft has invested $13 billion in a for-profit subsidiary, for what would be a 49% stake.
The Justice Department will take the lead in investigating whether Nvidia violated antitrust laws, while the FTC will examine the conduct of OpenAI and Microsoft.
The regulators struck the deal over the past week, and it is expected to be completed in the coming days, the person said.
Nvidia has roughly 80% of the AI chip market, including the custom AI processors made by the cloud computing companies like Google, Microsoft and Amazon.com. That domination helps the company report gross margins between 70% and 80%.
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