With company values skyrocketing and CEOs acting like rock stars, U.S. regulators are ready to rein in the AI giants.
What happened: The U.S. Federal Trade Commission (FTC) and Department of Justice (DOJ) are close to finalizing a deal to divvy up responsibility for antitrust regulation of AI industry leaders. The FTC will handle Microsoft and OpenAI, while the DOJ will take Nvidia.
- Microsoft has its finger in so many AI pies that it’s ripe for scrutiny. In fact, the FTC just launched a probe into the firm’s US$650 million deal with AI startup Inflection.
- Customers and rivals have accused Nvidia of using monopolistic sales tactics, like upselling and giving preferential treatment to firms that buy its other products.
Why it matters: Regulators are trying to be proactive rather than reactive in their attempt to stop the rapidly booming AI industry from becoming too consolidated before it’s too late. Smoothing out which body handles what firm opens the floodgates for antitrust probes.
Yes, but: It’ll be tough to get charges to stick. Microsoft’s AI deals are designed to avoid antitrust challenges, and finding proof Nvidia is causing consumer harm — a key aspect of monopoly cases — won’t be easy.—QH