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

US authorities may investigate Microsoft, OpenAI and Nvidia to see whether those 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 authorized to investigate the three companies, writes The New York Times based on two anonymous sources. This concerns two separate investigations, with the Ministry of Justice looking at Nvidia and the FTC looking at the deal between Microsoft and OpenAI.

The Public Prosecution Service suspects Nvidia of abusing its market power to keep customers on board. This could be due to the software that comes with Nvidia GPUs. This would quickly lock customers 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 further.

The other investigation focuses on the deal between Microsoft and OpenAI. Microsoft took a 49 percent minority stake in the AI ​​company in 2022, giving it a major say. This deal allows Microsoft to incorporate OpenAI technology into 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 exert a lot of influence on the emerging AI technology.

The FTC also suspects that Microsoft has structured its stake in OpenAI to avoid antitrust investigations. Microsoft is also said to have previously made an acquisition of research lab Inflection. The company would have taken over employees there, but that would also have been done in a way in which Microsoft did not take lawmakers into account.