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<\/div>\nThe US Federal Trade Commission is examining the nature of Microsoft Corp.\u2019s investment in OpenAI Inc. and whether it may violate antitrust laws, according to a person familiar with the matter.<\/p>\n
The inquiries are preliminary and the agency hasn\u2019t opened a formal investigation, according to the person, who asked not to be named discussing a confidential matter.<\/p>\n
Microsoft didn\u2019t report the transaction to the agency because the investment in OpenAI doesn\u2019t amount to control of the company under US law, the person said. OpenAI is a non-profit and acquisitions of non-corporate entities aren\u2019t reported under US merger law, regardless of value. Agency officials are analyzing the situation and assessing what its options are.<\/p>\n
An FTC spokesperson declined to comment. Microsoft didn\u2019t immediately respond to a request for comment.<\/p>\n
The UK\u2019s Competition and Markets Authority is also gathering information from stakeholders to determine whether the collaboration between the two firms threatens competition in the UK, home of Google\u2019s AI research lab Deepmind. The agency is taking comments until Jan. 3 before making a decision on a formal investigation.<\/p>\n
Microsoft has invested some $13 billion in OpenAI and integrated its products into its core businesses, quickly becoming the undisputed leader of AI among big tech firms and forcing Alphabet Inc.\u2019s Google to scramble to catch up.<\/p>\n
FTC Chair Lina Khan has been vocal about concerns raised by AI technology and the agency is already scrutinizing some aspects. It has opened a consumer protection probe into into OpenAI, questioning whether its popular ChatGPT conversational AI bot puts consumers\u2019 reputations and data at risk.<\/p>\n
That probe into the Microsoft-backed startup marked the first official inquiry into a technology that has the potential to change almost every aspect of people\u2019s lives and has become almost equally fascinating for its potential to run awry.<\/p>\n
Khan has said enforcers \u201cneed to be vigilant early\u201d with transformative tools like artificial intelligence.<\/p>\n
Khan also has Microsoft\u2019s growth in her sights. She\u2019s continuing the agency\u2019s challenge of the company\u2019s $69 billion acquisition of video game company Activision Blizzard Inc., which the agency is fighting on appeal.<\/p>\n
The firing \u2014 and subsequent rehiring \u2014 of Sam Altman as chief of OpenAI last month exposed how closely tied the two companies have become. Microsoft shares fell as much as 2.4% immediately after OpenAI\u2019s board ousted Altman. Microsoft chief executive officer Satya Nadella personally helped negotiate and advocate for his return to the company \u2014 at one point offering to hire Altman himself, along with other employees at OpenAI who wanted to leave.<\/p>\n
The move by the UK raises the question of whether antitrust regulators in other regions, namely the European Union and the US, will launch similar probes. When asked to comment on the CMA\u2019s move, a European Commission spokesperson said the regulator had been \u201cfollowing the situation of control over OpenAI very closely.\u201d<\/p>\n
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