image credit:Cologne, Germany – July 2021: Microsoft corparaion office building. European Microsoft Office.

image credit: inflexion.AI

Microsoft hired Inflection’s co-founders and other employees to manage its Copilot program in March, and Inflection claimed that its AI model will be hosted on Microsoft’s cloud platform. Microsoft allegedly paid Inflection $650 million. Microsoft disclosed a hiring choice, not a purchase.

According to a source, the FTC investigation into Microsoft is focused on whether the company failed to tell authorities about its acquisition of Inflection.

According to two sources, the FTC and Justice Department are close to reaching an agreement this week to oversee Microsoft, Google, Nvidia, OpenAI, and others.

West stated that this clearance is normally required prior to an investigation. “This proves their speed.”

Microsoft endorsed its Inflection relationship but made no mention of the DOJ-FTC agreement.

Nvidia, OpenAI, Inflection, and Google did not answer. The DOJ and FTC declined to comment. The Wall Street Journal and New York Times covered the FTC-DOJ deal and the Microsoft inquiry.

The division-of-labor agreement between the US authorities allows for more in-depth investigations into a sector that has piqued the interest of investors, consumers, and opponents who believe AI should be regulated to prevent job displacement, discrimination, and fraud. The FTC and DOJ can investigate IT behemoths and AI firms for anticompetitive behavior.

As the prospect of new US AI regulations fades, enforcers apply existing rules to the business. The EU has surpassed the United States in AI law by limiting AI use in high-risk situations. AI-powered social scoring systems and biometric technologies that predict race, politics, or sexual orientation are prohibited by the EU AI Act. It also prohibits AI from evaluating emotions in schools and workplaces, as well as certain automated crime prediction techniques.

For years, technology opponents and regulators have warned that tech giants may take control of entire industries. This resulted in high-profile US government antitrust charges against Amazon, Apple, Google, Meta, and Microsoft.

Since OpenAI developed ChatGPT in 2022, generative AI has grown dramatically. Some experts believe that IT companies will use their financial and social power to exert control over the area.

Nvidia’s rising stock price reflects the AI boom and its position as a top processor chip vendor for advanced AI models. On Wednesday, Nvidia surpassed Apple as the second-largest publicly traded business in the United States, with a market capitalization of $3 trillion.

The DOJ is also concerned about artificial intelligence (AI). Susan Athey, a Stanford University professor and artificial intelligence expert, was awarded the antitrust division’s top economist for 2022.

That might include gatekeeping or bottlenecking, making it more difficult for clients to switch providers, or becoming the largest buyer of important suppliers such as AI chips, so restricting competitors.