U.S. Clears Way for Antitrust Inquiries of Nvidia, Microsoft and OpenAI

🌈 Abstract

The article discusses the agreement between the U.S. Justice Department and the Federal Trade Commission to divide responsibility for investigating three major players in the artificial intelligence (AI) industry - Microsoft, OpenAI, and Nvidia.

🙋 Q&A

[01] Regulatory Scrutiny of AI Companies

1. What is the agreement between the Justice Department and the Federal Trade Commission regarding the investigation of AI companies?

• The Justice Department will take the lead in investigating whether Nvidia's behavior has violated antitrust laws.
• The FTC will play the lead role in examining the conduct of OpenAI and Microsoft.
• This agreement signals intensifying scrutiny by the government into the AI industry, which has the potential to significantly impact jobs, information, and people's lives.

2. What are the key points about the regulatory scrutiny of AI companies?

• For months, Nvidia, Microsoft, and OpenAI largely escaped the brunt of the Biden administration's regulatory scrutiny, but that began to change as generative AI technologies like ChatGPT gained prominence.
• The FTC has opened an investigation into whether OpenAI has harmed consumers through its data collection practices, and has started a broader inquiry into strategic partnerships between tech giants and AI startups.
• The U.S. lags behind Europe in regulating AI, as the EU has already agreed on landmark rules to govern the fast-evolving technology.

[02] Dominance of AI Companies

1. What are the concerns about the dominance of Nvidia, Microsoft, and OpenAI in the AI industry?

• Nvidia, as the primary provider of GPUs for AI tasks, has seen its sales and stock price soar, raising concerns about its dominance and how its software locks customers into using its chips.
• Microsoft, as the owner of a 49% stake in OpenAI and the integrator of its technology into its own products, has become a leading purveyor of AI, raising questions about its influence over the emerging technology.
• There are concerns that Microsoft's deals with AI startups like Inflection AI may be structured in a way that allows it to avoid direct regulatory scrutiny.

2. What are the key points made by the Justice Department's top antitrust official regarding AI?

• Jonathan Kanter, the top antitrust official at the Justice Department, pointed to "structures and trends in AI that should give us pause," noting that AI relies on massive amounts of data and computing power, which can give already dominant firms a substantial advantage.