Nvidia, now the second most valuable company in the world by market capitalisation, is facing an antitrust investigation by the US Justice Department based on the very reason for its recent share price domination – its potential monopoly over AI semiconductors.
Microsoft Corp (NASDAQ:MSFT), currently the number one stock, is facing similar scrutiny by the Federal Trade Commission (FTC) over its relationship with generative-AI (GenAI) pioneer OpenAI and the hiring of several co-founders and staff from AI start up Inflection – touted as a hiring decision, not an acquisition.
Microsoft secured deals to use OpenAI’s GenAI technology for its Bing web search service, Edge internet browser, and Windows operating system, and is developing its Copilot AI program with staff hired from Inflection.
Nvidia has admitted to selling chips to its customers based on how likely they are to use them swiftly, which spawned concerns over the company’s ability to influence the semiconductor market and access to high-end AI-capable chips.
Justice department and FTC carve up AI oversight
The Justice Department (DOJ) and FTC are close to finalising an agreement on how to regulate and investigate AI companies, two individuals familiar with the matter told CNN.
The agreement would reportedly appoint the DOJ as lead investigator in the Nividia case, while the FTC will take the reigns on the Microsoft-OpenAI investigation, according to CNN’s sources.
The investigations will centre on whether the companies have leveraged their dominant positions in their respective markets to harm competition.
Microsoft did not comment on the investigation, but instead asserted its compliance with regulations in the matter.
“Our agreements with Inflection gave us the opportunity to recruit individuals at Inflection AI and build a team capable of accelerating Microsoft Copilot, while enabling Inflection to continue pursuing its independent business and ambition as an AI studio,” a Microsoft spokesperson said.
“We take our legal obligations to report transactions seriously and are confident that we have complied with those obligations.”
Nvidia, OpenAI, the DOJ and FTC also declined to comment on the investigations.