FTC Report Flags Potential Antitrust Risks in Big Tech-AI Partnerships

The Federal Trade Commission (FTC) has raised concerns over partnerships between major cloud service providers Microsoft, Amazon, and Google with AI developers OpenAI and Anthropic. In a staff report issued on Friday, the FTC highlighted potential competitive issues, focusing on how these alliances could impact access to computing resources, engineering talent, and sensitive information. The report specifically points to Microsoft's backing of OpenAI and Amazon and Alphabet/Google's collaborations with Anthropic as areas of concern. FTC Chair Lina Khan has expressed apprehension about the implications of these partnerships.

The partnerships between these tech giants and AI developers might lead to increased switching costs for companies working with AI technologies. This could result in a concentration of power and resources in the hands of a few large companies, potentially stifling competition. The FTC report outlines that these partnerships could give cloud providers unique access to sensitive information, raising antitrust concerns.

"The FTC’s report sheds light on how partnerships by big tech firms can create lock-in, deprive start-ups of key AI inputs, and reveal sensitive information that can undermine fair competition." – Lina Khan, FTC Chair

The report notes that Microsoft's partnership with OpenAI, along with Amazon and Google's ties with Anthropic, could affect how computing resources and engineering talent are allocated. These partnerships may limit the ability of other companies to compete on a level playing field. Rima Alaily, Microsoft's deputy general counsel, defended Microsoft's relationship with OpenAI in a statement to Bloomberg.

"enabled one of the most successful AI startups in the world and spurred a wave of unprecedented technology investment and innovation in the industry." – Rima Alaily, Microsoft's deputy general counsel

While the FTC scrutinizes these partnerships, changes in leadership could influence future oversight. President-elect Donald Trump has announced plans to replace Lina Khan as chair of the FTC. This change may affect how the commission addresses concerns about antitrust issues within the tech industry.