Behind almost every leading artificial intelligence (AI) start-up, you’ll find a tech giant fueling its rise.
Microsoft Corp., Alphabet Inc. and Amazon.com Inc. have invested billions in the top AI start-ups, supercharging the fast-growing AI sector and establishing the old guard of technology companies as kingmakers for a new generation of businesses.
Now, those deals are coming under scrutiny. The US Federal Trade Commission said Thursday that the three tech companies must provide information to the agency on their investments and partnerships with OpenAI and Anthropic. The FTC said it sent subpoenas to the companies to gather information on how the development of AI is impacting the competitive landscape.
More than any other company, Microsoft represents the unique relationship between Big Tech and AI startups. Microsoft committed to investing US$13 billion in OpenAI, integrated the AI company’s technology into virtually every corner of its business and played a key role in negotiating for Sam Altman to return as chief executive officer of OpenAI after he was ousted by the board. One of Microsoft’s executives recently joined OpenAI’s board as a nonvoting observer.
In the wake of Microsoft’s investment in OpenAI last January, other tech giants raced to partner with leading AI startups through funding and cloud computing deals, too. Salesforce Inc. led a round in Hugging Face at a US$4.5 billion valuation. Alphabet and Amazon.com invested billions in OpenAI rival Anthropic. And Nvidia Corp. seemed to back almost every AI startup of note.
For AI companies, these deals with Big Tech can serve as a vital lifeline. It’s extremely costly and computationally intensive to build large language models, the technology that underpins AI chatbots like ChatGPT. The tech giants are among the only companies with the infrastructure and funds to support these efforts.
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That dynamic is now drawing the attention of regulators on both sides of the Atlantic. Microsoft’s partnership with OpenAI is facing fresh scrutiny from UK and US competition regulators. In the US, the FTC had previously been tasked by the Biden administration with promoting “a fair, open, and competitive AI ecosystem.”
In comments during a public workshop Thursday, FTC Chair Lina Khan said the agency is closely monitoring the industry and warned that AI companies “cannot use claims of innovation as cover for law breaking." “There is no AI exemption from the laws on the books,” she said.
