US to investigate AI market power of Microsoft, Nvidia and OpenAI

US authorities are allowed to investigate Microsoft, OpenAI and Nvidia to see whether these companies have abused their market power in the artificial intelligence market. The companies are said to maintain a vendor lock-in and unfairly bundle products.

The US Department of Justice and the Federal Trade Commission have been given permission to launch an investigation into the three companies, The New York Times reports based on two anonymous sources. These are two separate investigations, with the Department of Justice looking into Nvidia, and the FTC into the deal between Microsoft and OpenAI.

The Public Prosecution Service suspects Nvidia of abusing its market power to keep customers on board. This is said to be due to the software that comes with Nvidia GPUs. As a result, customers would quickly become locked into Nvidia's ecosystem if they want to train AI products. The way in which Nvidia supplies chips to customers is also under fire, according to The New York Times, although the newspaper does not elaborate on this.

The other investigation focuses on the deal between Microsoft and OpenAI. Microsoft took a minority stake of 49 percent in the AI ​​company in 2022 and therefore has a significant say. This deal allows Microsoft to include OpenAI technology in many of its products, such as a chatbot in Bing and the Copilot assistant in Windows 11. The FTC suspects Microsoft of abusing its power in this way. Microsoft could thus exert a great deal of influence on the emerging AI technology.

The FTC also suspects that Microsoft has structured its stake in OpenAI in such a way that it remains unscathed in antitrust investigations. Microsoft is also said to have previously made an acquisition of research lab Inflection. The company is said to have taken over employees there, but this too is said to have been done in a way that Microsoft does not take into account legislators.