Key points:

  • The US Department of Justice and the FTC may launch antitrust investigations against Microsoft, Nvidia and OpenAI.
  • The companies’ actions raise concerns about the impact of AI on competition and consumer rights.
  • Nvidia has about 80% of the AI ​​chip market, earning gross margins in the 70% to 80% range.

The US Department of Justice and the Federal Trade Commission (FTC) have reached an agreement that clears the way for potential antitrust investigations into the dominant roles that Microsoft, OpenAI and Nvidia play in the artificial intelligence industry.

Why might an investigation be launched?

The joint announcement by the US Department of Justice and the Federal Trade Commission on the distribution of antitrust authority over Microsoft and Nvidia marks a new stage in the regulation of the activities of large technology companies.

The decision comes amid growing concerns about the concentration of power in the hands of a few companies that dominate artificial intelligence (AI). Microsoft and Nvidia, in addition to their industry leadership, are among the world’s largest companies by market capitalization, with Nvidia’s market cap recently surpassing $3 trillion.

US antitrust authorities have repeatedly raised concerns about a number of issues related to the impact of AI on competition and consumer rights. These include:

  • Big tech companies benefit from access to data used to train AI models.
  • The impact of generative AI on the creative work market.
  • The ability to use partnerships between companies to bypass merger review procedures.

The agreement between the Justice Department and the FTC reflects a similar precedent set in 2019, when the agencies delineated oversight powers over the activities of large technology companies. As a result, the FTC filed cases against Meta and Amazon, and the Department of Justice filed lawsuits against Apple and Google, accusing them of violating antitrust laws. The cases are still pending and the companies deny any wrongdoing.

In July 2023, the FTC also launched an investigation into OpenAI, accusing the company of violating consumer protection laws by jeopardizing the privacy and security of user data.

Companies’ reaction

The US Department of Justice and the Federal Trade Commission have entered into an agreement to share antitrust oversight authority over Microsoft’s investment in OpenAI. Even though Open AI is still a non-profit organization, the important thing is that Microsoft plans to invest $13 billion in it.

In addition, the Department of Justice will investigate Nvidia for possible antitrust violations, while the Federal Trade Commission will focus on the conduct of OpenAI and Microsoft.

The agreement between regulators was reached last week and is expected to be finalized in the coming days.

Nvidia dominates the AI ​​chip market, with about 80% share, including dedicated AI processors used by Google, Microsoft and This dominant position allows the tech giant to earn gross margins in the range of 70% to 80%.

Representatives from Nvidia and OpenAI did not comment on the regulatory agreement. Microsoft said the company takes its legal obligations to disclose transactions seriously and is confident it has met all necessary requirements.

The agreement between the DOJ and the FTC follows the FTC’s January request to OpenAI, Microsoft, Alphabet, Amazon and Anthropic to provide information on recent investments and partnerships involving generative artificial intelligence companies and cloud service providers.