A reliable source disclosed that the Federal Trade Commission and the Justice Department will launch investigations into Microsoft, OpenAI, and Nvidia to investigate their dominance in the artificial intelligence sector.

The FTC will spearhead the examinations into Microsoft and OpenAI, while the DOJ will concentrate on Nvidia. The focus of the probes will be on the firms’ behaviors rather than their mergers or acquisitions, as per the insider.

The initial report on these inquiries was made by The New York Times.

As emerging players like Anthropic and OpenAI gain traction in the generative AI segment with projects such as ChatGPT and Claude chatbots, tech behemoths like Meta, Google, Amazon, and Microsoft engage in an AI competition to incorporate these innovations, anticipating a market surpassing $1 trillion in revenue by the next decade.

An example is Microsoft’s significant capital injection of $1 billion into OpenAI back in 2019, which has since ballooned to approximately $13 billion. Microsoft extensively employs OpenAI’s framework for its Copilot chatbot and offers open-source models on its Azure cloud platform.

The substantial investments are deemed essential due to the high costs associated with building and training AI models, which typically demand a multitude of specialized chips primarily sourced from Nvidia. Meta, in developing its proprietary Llama model, has disclosed significant investments in Nvidia’s GPUs, contributing to the chipmaker’s impressive year-over-year revenue growth surpassing 250%.

The news of the impending antitrust probes surfaces shortly after a faction of existing and former OpenAI staff members published an extensive critique earlier this week, expressing unease about the unchecked advancement within the AI industry and the lack of safeguards for whistleblowers.

The employees highlighted the financial motivations for AI firms to evade effective oversight, emphasizing the inadequacy of current corporate governance structures in addressing this concern. They stressed the insufficient obligations to share vital information with authorities or the broader society voluntarily.

Furthermore, this development follows the FTC’s recent decision in January to conduct a thorough investigation into major players in the AI domain, such as Amazon, Alphabet, Microsoft, Anthropic, and OpenAI.

FTC Chair Lina Khan announced this initiative during the agency’s tech summit on AI, describing it as a thorough investigation into the partnerships and investments between AI developers and major cloud service providers.

Through the authority granted by a 6(b) study — derived from Section 6(b) of the FTC Act — the regulator can independently scrutinize AI firms, issue civil investigative demands, and mandate detailed reports and responses regarding their operations.

“At the FTC, the swift evolution and deployment of AI are informing our strategic approach,” Khan emphasized. “No exemptions are granted to AI entities from existing laws, and we are closely monitoring potential abuses of power by companies that could hinder competition or mislead the public.”

Despite attempts to gather comments, OpenAI remained unresponsive, while Microsoft and Nvidia opted not to offer any statements.