WASHINGTON—In a move that signals all organizations, including credit unions, should pay close attention to how they work with AI, the Federal Trade Commission has issued orders to five companies requiring them to provide information regarding recent investments and partnerships involving generative AI companies and major cloud service providers.
According to the FTC, its 6(b) inquiry will scrutinize corporate partnerships and investments with AI providers to build a better internal understanding of these relationships and their impact on the competitive landscape. The compulsory orders were sent to Alphabet, Inc., Amazon.com, Inc., Anthropic PBC, Microsoft Corp., and OpenAI.
“History shows that new technologies can create new markets and healthy competition. As companies race to develop and monetize AI, we must guard against tactics that foreclose this opportunity, FTC Chair Lina M. Khan said in a statement. “Our study will shed light on whether investments and partnerships pursued by dominant companies risk distorting innovation and undermining fair competition."
Authorization for Orders
The FTC said it issued its orders under Section 6(b) of the FTC Act, which authorizes the Commission to conduct studies that allow enforcers to gain a deeper understanding of market trends and business practices.
“Companies are deploying a range of strategies in developing and using AI, including pursuing partnerships and direct investments with AI developers to get access to key technologies and inputs needed for AI development,” the FTC stated.
The orders issued were sent to companies involved in three separate multi-billion-dollar investments: Microsoft and OpenAI, Amazon and Anthropic, and Google and Anthropic.
The FTC further said its inquiry will help it deepen enforcers understanding of the investments and partnerships formed between generative AI developers and cloud service providers.
Specific Requests
The FTC said it is specifically seeking:
- Information regarding a specific investment or partnership, including agreements and the strategic rationale of an investment/partnership
- The practical implications of a specific partnership or investment, including decisions around new product releases, governance or oversight rights, and the topic of regular meetings
- Analysis of the transactions’ competitive impact, including information related to market share, competition, competitors, markets, potential for sales growth, or expansion into product or geographic markets
- Competition for AI inputs and resources, including the competitive dynamics regarding key products and services needed for generative AI
- Information provided to any other government entity, including foreign government entities, in connection with any investigation, request for information, or other inquiry related to these topics
The companies will have 45 days from the date they receive the order to respond, the FTC said.
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