Unveiling the FTC's Probe into Microsoft's OpenAI Investment: Exclusive Insights
Published on: March 10, 2024
Microsoft Corp (NASDAQ: MSFT) experienced a slight increase in its stock value, ending 1.0% up on Friday, despite emerging reports of the U.S. Federal Trade Commission (FTC) examining the company's substantial investment in OpenAI, the entity behind ChatGPT.
Sources familiar with the matter informed Bloomberg that the FTC is currently assessing whether Microsoft's multi-billion-dollar investment in OpenAI could potentially breach antitrust laws. This scrutiny comes amidst growing concerns over the competitive dynamics within the AI and tech sector.
For now, the inquiry remains preliminary, with the FTC not yet initiating a formal investigation into the Microsoft-OpenAI partnership. The U.S. regulator has refrained from commenting on these developments, as noted in the Bloomberg report.
This news follows over a month after Microsoft reported robust financial results for the first quarter, surpassing Wall Street estimates. The company's stock, $MSFT, has seen an upward trajectory, currently up more than 50% since the beginning of 2023.
Notably, Microsoft did not report its investment in OpenAI to the FTC, as OpenAI operates as a non-profit organization. Consequently, the transaction did not confer ownership of OpenAI to Microsoft. Frank Shaw, a spokesperson for Microsoft, emphasized that while details of the agreement remain confidential, Microsoft does not own any part of OpenAI but is entitled to a share of profit distribution.
In a related development, the Competition and Markets Authority of the United Kingdom is also reportedly examining the Microsoft-OpenAI collaboration to determine its impact on competition in the region. OpenAI has received approximately $13 billion in investment from the Washington-based tech giant.
The scrutiny from regulatory bodies like the FTC and the UK's Competition and Markets Authority reflects the growing importance of AI technology in the global market and the need for regulatory oversight to ensure fair competition and innovation in this rapidly evolving field.