Dive Brief:
- The Federal Trade Commission launched an inquiry into corporate partnerships and investments between cloud service providers and rising generative AI companies Thursday. The announcement marks the latest sign of regulatory interest in the technology and its implications for business dynamics.
- Alphabet, Amazon, Anthropic, Microsoft and OpenAI were sent compulsory orders under Section 6(b) of the FTC Act, which lets the agency request information on market trends and business practices. Findings from the inquiry can help inform future actions, the agency said.
- “Our study will shed light on whether investments and partnerships pursued by dominant companies risk distorting innovation and undermining fair competition," FTC Chair Lina Khan said in the announcement.
Dive Insight:
Regulators have kept a close watch over generative AI, as enterprises race to adopt the technology.
While previous regulatory efforts — such as The White House's October executive order — have focused on implementation risks, the FTC's action reflects a keener scrutiny of competitive practices among technology providers.
“History shows that new technologies can create new markets and healthy competition,” Khan said. “As companies race to develop and monetize AI, we must guard against tactics that foreclose this opportunity.”
The agency's request for information centers around multibillion-dollar partnerships between Microsoft and OpenAI, Amazon and Anthropic and Google and Anthropic.
The FTC reportedly opened an inquiry into OpenAI and its data security practices in July, the Washington Post reported. The agency declined to comment on that investigation in an email to CIO Dive Thursday.
In March, the agency issued a call for information seeking public comment on cloud service providers and their business practices. The agency sought to assess competition in the market, review security risks and evaluate industry-specific dependency on cloud providers.
