U.S. regulators to open antitrust probes into Nvidia, Microsoft and OpenAI

The Federal Trade Commission and the Justice Department are set to open antitrust investigations into Microsoft, OpenAI and Nvidia, examining the powerful companies’ influence on the artificial intelligence industry, a source familiar confirmed to CNBC.

The FTC will take the lead on looking into Microsoft and OpenAI, while the DOJ will focus on Nvidia, and the investigations will focus on the companies’ conduct, rather than mergers and acquisitions, according to the source.

The New York Times first reported on the investigation.

As startups like OpenAI and Anthropic — the companies behind the ChatGPT and Claude chatbots — gain steam in the generative AI market, tech giants like Google, Microsoft, Amazon and Meta have been part of an AI arms race of sorts, racing to integrate the technology to ensure they don’t fall behind in a market that’s predicted to top $1 trillion in revenue within a decade.

Microsoft, for instance, first invested $1 billion into OpenAI in 2019. The size of its investment has since swelled to about $13 billion. Microsoft heavily uses OpenAI’s model for its Copilot chatbot and offers open source models on its Azure cloud.

The hefty investments are necessary because AI models are notoriously expensive to build and train, requiring thousands of specialized chips that, to date, have largely come from Nvidia. Meta, which is developing its own model called Llama, has said it’s spending billions on Nvidia’s graphics processing units, one of the many companies that’s helped the chipmaker bolster year-over-year revenue by more than 250%.

News of the coming antitrust investigation comes days after a group of current and former OpenAI employees published an open letter Tuesday, describing concerns about the AI industry’s rapid advancement despite a lack of oversight and an absence of whistleblower protections for those who wish to speak up.

“AI companies have strong financial incentives to avoid effective oversight, and we do not believe bespoke structures of corporate governance are sufficient to change this,” the employees wrote, adding that the companies “currently have only weak obligations to share some of this information with governments, and none with civil society. We do not think they can all be relied upon to share it voluntarily.”

The news also follows the FTC’s January decision to conduct an extensive study on AI industry heavyweights, including Amazon, Alphabet, Microsoft, Anthropic and OpenAI.

FTC Chair Lina Khan announced the inquiry in January during the agency’s tech summit on AI, describing it as a “market inquiry into the investments and partnerships being formed between AI developers and major cloud service providers.”

By invoking its authority to conduct a so-called 6(b) study — named for Section 6(b) of the FTC Act — the regulator can look into the AI companies separately from its law enforcement arm and make civil investigative demands. For example, the agency can order companies to file specific reports and answer questions in writing about their businesses.

“At the FTC, the rapid development and deployment of AI is informing our work across the agency,” Khan said at the time. “There’s no AI exemption from the laws on the books, and we’re looking closely at the ways companies may be using their power to thwart competition or trick the public.”

Microsoft and OpenAI did not immediately respond to requests for comment. An Nvidia spokesperson declined to comment.

— CNBC’s Eamon Javers contributed to this report.