US regulators are wary of Microsoft, Google and Amazon’s desire to invest in AI startups

Last Friday, the US Federal Trade Commission (FTC) expressed its concern about the desire of cloud giants Microsoft, Google and Amazon to invest in artificial intelligence startups. These kinds of deals can not only give large market players an advantage in access to technology, but also to the human resources and data needed to train large language models.

Image source: Microsoft

The attention of American regulators was drawn to the relationship between Microsoft and OpenAI, as well as Google and Amazon (AWS) with the startup Anthropic. As Bloomberg notes, the FTC investigation revealed that at least one of the large companies acting as an investor in these startups gained access to important financial statements of one of them on a regular basis, as well as information about the structure of the user base. One of the cloud giants was also able to use the data generated by the chatbot to train its own large language model.

In addition, the FTC is alarmed by the presence of obligations on the part of startups to use the infrastructure of cloud giants to develop their own artificial intelligence systems. Essentially, in the case of OpenAI, a significant portion of Microsoft’s thirteen billion US dollars of investment was in the form of virtual credits that can be spent on Microsoft’s own services. Regulators call this practice “locked-in costs,” indicating the creation of conditions that reduce risks for investors compared to classic financing schemes.

Cooperation between startups and major players in the cloud market, according to the FTC, can also provide the latter with an advantage in the form of priority access to developments in the field of artificial intelligence. Another problem associated with the consolidation of such a business is limiting the access of other companies to valuable specialists in this young and dynamically developing field. In fact, qualified personnel can only be trained within leading companies, and if large market players divide it among themselves, beginners will have nowhere to find specialists.

The FTC investigation has no specific timeline; it could drag on for several years, and it is difficult to judge what trajectory it will take under the agency’s new leadership, which will be appointed by US President Donald Trump, who takes office today.