FTC report scrutinizes OpenAI’s and Anthropic’s partnerships with cloud giants
Complicated, opaque partnerships raise concerns of competition and fair business practices in a fast-moving industry.
On the last working day of Lina Khan’s FTC, the agency announced the release of a report that examines the terms of three of the largest deals between AI companies and cloud-computing giants, after requesting information from the parties in January 2024. The deals examined:
Microsoft’s $13.75 billion investment in OpenAI
Amazon’s $8 billion investment in Anthropic
Google’s $2.55 billion investment in Anthropic
The agency requested nonpublic details of the partnerships from the companies, as part of the agency’s effort to monitor competition and power dynamics in the fast-moving AI industry.
In the announcement, outgoing FTC chair Lina Khan wrote:
“As companies rapidly deploy generative AI technologies, enforcers and policymakers must stay vigilant to guard against business strategies that undermine open markets, opportunity, and innovation. 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.”
Microsoft’s partnership with OpenAI, for example, contains many elements that could have huge implications for the industry. The deal calls for Microsoft’s to be the “exclusive cloud provider” for OpenAI’s computing needs and for Microsoft to build a massive supercomputer “in collaboration with and exclusively for OpenAI.”
Recently, The Information reported that key terms of this deal were still being negotiated, including Microsoft’s equity stake in OpenAI, and the definition of the moment when OpenAI actually achieves “artificial general intelligence” (which would signal the end of the deal).
The redacted report examined the terms of the deals, including equity and revenue sharing, exclusivity rights, infrastructure spending commitments, the sharing of key employees, and the exchange of proprietary technology and sensitive business information. The report also examined how many of the cloud providers are starting to work on their own specialized GPUs to reduce dependence on industry AI-chip leader Nvidia.
The report listed some areas of concern that should continue to be scrutinized, such as a cloud-service provider deciding to sell its services only to its partners, or one partnership affecting the availability of AI engineering talent.
