Microsoft, Nvidia to Face US Antitrust Probes Over Moves in AI

The two US antitrust agencies have agreed to divide responsibility over the artificial intelligence industry, giving the Federal Trade Commission the go-ahead to open a probe into Microsoft Corp.’s relationship with OpenAI, according to people familiar with the matter.

The Justice Department will probe whether Nvidia Corp. violated antitrust law and retain oversight over Alphabet Inc.’s Google, according to the people, who asked not to be named discussing inter-agency negotiations.

The agencies reached the deal in the last few days after more than six months of negotiations, the people said. The agreement gives each agency authority to open an antitrust probe into the company’s conduct as well as recent deals related to it.

As part of that, the FTC has opened a probe into whether Microsoft failed to properly notify the antitrust agencies about its deal with Inflection AI, according to the people. In March, the Redmond, Washington-based software giant agreed to pay the startup $650 million to license its AI software and hired much of Inflection’s staff.

The DOJ and FTC declined to comment. Representatives for Microsoft and Inflection didn’t immediately respond to requests for comment. OpenAI, Google and Nvidia declined to comment.

The Justice Department and FTC jointly enforce US antitrust laws and work together to coordinate which agency will investigate mergers and anticompetitive conduct through a process internally known as clearance. High-profile matters, such as those involving Google, have previously caused bitter clearance disputes between the agencies.

The New York Times reported the news earlier.

The European Union also looked at Microsoft’s investment in OpenAI but ultimately decided against a formal probe. The UK’s competition watchdog has also said it would examine the partnership but separately decided last month that a Microsoft deal with French AI company Mistral AI doesn’t qualify for an investigation.

--With assistance from Jackie Davalos and Davey Alba.

To contact the reporter on this story:
Leah Nylen in Washington at lnylen2@bloomberg.net

To contact the editors responsible for this story:
Sara Forden at sforden@bloomberg.net

Robin Ajello

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