US Federal Trade Commission: Microsoft Corporation's $13 billion investment in OpenAI may exacerbate the risk of monopolizing the AI market.

The Federal Trade Commission (FTC) said in a report released on Friday that Microsoft Corporation's $13 billion investment in OpenAI has raised concerns, which may extend the tech giant's dominant position in cloud computing to the emerging artificial intelligence (AI) market. The report pointed out that Microsoft Corporation's collaboration with OpenAI, as well as Amazon.com, Inc. and Alphabet Inc. Class C's collaborations with AI company Anthropic, could lead to the risk of these AI developers being "completely acquired" by the tech giants in the future. Since the ChatGPT sparked the generative AI frenzy, AI startups have sought support from large tech companies to sustain costly and resource-intensive technology development. However, the FTC stated in the report that these cloud computing giants often require AI startups to use part of the investment in their own products and services. This may not only lead to a concentration of core talent in the AI field in a few companies, but may also weaken market competition by allowing these companies to gain important data related to chip development, model training, and data center construction. FTC Chairman Lina Khan stated in a statement, "This report reveals how large tech companies are locking up markets through collaborations, which may deprive startups of critical AI investment resources and expose sensitive information, undermining fair competition." The report also revealed that at least one large tech company (not specifically named) obtained "confidential and potentially sensitive financial performance information" through collaborations with AI startups, including weekly revenue trends and customer dynamics updates. In addition, certain agreements stipulate that tech giants can access the output data of AI startups' models, such as synthetic data generated by ChatGPT based on user cues. This data is then used to train the tech giants' own AI models. FTC also pointed out that this "circular spending" model may protect companies such as Microsoft Corporation, Amazon.com, Inc., and Alphabet Inc. Class C from investment risks. For example, many of Microsoft Corporation's investments in OpenAI are achieved through consumption quotas of Azure cloud computing services. The report mentioned that these collaborative relationships may also have a negative impact on the engineering market. The report stated, "Skills required to develop and deploy large-scale generative AI models are relatively scarce and may be difficult to obtain outside of large AI developers or cloud service giants." This phenomenon may further solidify the market dominance of a few companies. In addition, FTC criticized the practice of cloud service giants investing in AI companies to benefit their own businesses. Many investments exist in the form of quotas for cloud computing services and require AI startups to consume on these platforms, which undoubtedly increases the cost for AI startups to switch collaboration platforms. FTC stated that its investigation was conducted based on the so-called "6(b) power," which gives it the authority to summon corporate information for market research. Although these investigations typically take several years to complete, the results may provide the basis for future regulatory actions. Since 2023, FTC has been investigating whether OpenAI's ChatGPT violates consumer protection laws. In addition, in November 2023, FTC launched a broad antitrust investigation against Microsoft Corporation, including its investment activities in the field of artificial intelligence.