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THE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & LifestyleTHE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & Lifestyle

Technology

Technology

Federal investigators investigate Microsoft’s startup acquisition as AI grows.

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image credit: microsoft

Microsoft hired Inflection’s co-founders and other workers to handle its Copilot initiative in March, and Inflection stated its AI model will be hosted on Microsoft’s cloud platform. Microsoft allegedly paid Inflection $650 million. Microsoft disclosed the hiring decision, not an acquisition.

The DOJ would investigate Nvidia, while the FTC would probe Microsoft and OpenAI, the persons said. That agreement may be finalized in a few days. Google may remain under DOJ oversight, one individual said. The probes would examine whether the companies used their AI industry dominance to oppress competitors through abusive and unlawful behavior.

Sarah Myers West, managing director of the AI Now Institute and former FTC AI advisor, said the agreement suggests enforcers would target major AI businesses.

West said this clearance is usually required before an investigation. “This proves their speed.”

Microsoft endorsed its Inflection partnership but did not mention the DOJ-FTC deal.

Nvidia, OpenAI, Inflection, and Google have not responded. The DOJ and FTC declined comment. The Wall Street Journal and New York Times reported on the FTC-DOJ agreement and Microsoft investigation.

The US agencies’ division-of-labor agreement allows deeper probes of a sector that has excited investors, consumers, and opponents who feel AI needs regulation to prevent job displacement, discrimination, and fraud. The FTC and DOJ can probe tech giants and AI companies for anticompetitive activities.

Technology opponents and regulators have warned for years that tech companies may control entire industries. That prompted high-profile US government antitrust suits against Amazon, Apple, Google, Meta, and Microsoft.

Since OpenAI introduced ChatGPT in 2022, generative AI has expanded significantly. Tech companies may use their financial and social power to control the area, say some.

Nvidia’s growing stock price reflects the AI frenzy and its role as a leading processor chip vendor for sophisticated AI models. On Wednesday, Nvidia overtook Apple as the second-largest publicly traded company in the US, with a $3 trillion market cap.

AI is also a DOJ concern. The antitrust division named Stanford University professor and AI expert Susan Athey its top economist in 2022.

That might involve gatekeeping or bottlenecking, making it harder for customers to switch providers, or becoming the biggest buyer of critical suppliers like AI chips and blocking competitors.

Criminal sanctions are one of the DOJ’s distinctive instruments; thus, they may be considered.

 


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