US Launches AI Antitrust Investigation Targeting Nvidia, MS, and OpenAI

U.S. federal regulators have agreed to conduct an antitrust investigation into the dominant roles of Microsoft (MS), OpenAI, and Nvidia in the artificial intelligence (AI) industry, the American daily newspaper The New York Times (NYT) reported on the 5th (local time).

According to NYT citing sources, the U.S. Department of Justice and the Federal Trade Commission (FTC) agreed last week to divide responsibilities for investigating these three major companies in the AI industry, and the process is expected to be completed within a few days.

Under this agreement, the U.S. Department of Justice will lead the investigation into whether Nvidia's actions violate antitrust laws, while the FTC will investigate the actions of OpenAI and MS. NYT assessed that this agreement indicates strengthened oversight of AI by the U.S. Department of Justice and FTC.

U.S. semiconductor company Nvidia controls more than 80% of the graphics processing unit (GPU) market, which is essential for training and inference in generative AI. With the spread of AI, demand for Nvidia GPUs has surged, causing the company's stock price to soar more than 200% over the past year.

MS has also become a major AI supplier. MS formed a partnership with OpenAI, the developer of the generative AI ChatGPT, investing a total of $13 billion to hold a 49% stake. MS integrated OpenAI's technology into its search engine 'Bing' and incorporated generative AI technology into its office software such as Word and Excel.

The American daily The Wall Street Journal (WSJ) reported that the FTC is investigating whether the partnership between MS and the AI startup 'Inflection AI' was intended to avoid government antitrust scrutiny. In March, MS appointed Inflection AI's co-founder as head of AI business and recruited most of the startup's 70 employees. Additionally, MS agreed to pay approximately $650 million (about 892.5 billion KRW) as part of the technology resale license fees.

WSJ, citing sources, reported that the FTC is investigating the deal between MS and Inflection AI, seeking information on how and why the two companies finalized their partnership.