The U.S. Justice Department and the Federal Trade Commission have reportedly finalized an agreement to pave the way for potential antitrust investigations into the dominance of Microsoft Corp (NASDAQ:MSFT), OpenAI, and Nvidia Corp (NASDAQ:NVDA) in the artificial intelligence sector.
The agreement highlights increased regulatory attention on AI industry concentration, according to a report from Reuters.
Microsoft and Nvidia, both industry leaders, have seen massive growth in market capitalization, with Nvidia’s value recently exceeding $3 trillion.
U.S. antitrust authorities have raised issues ranging from data access advantages of Big Tech to potential avoidance of merger reviews through corporate partnerships.
The recent division of responsibilities echoes a similar 2019 arrangement between the DOJ and FTC concerning Big Tech oversight, which led to ongoing cases against companies like Meta Platforms Inc (NASDAQ:META), Amazon.Com Inc (NASDAQ:AMZN), Apple Inc (NASDAQ:AAPL), and Alphabet Inc’s (NASDAQ:GOOGL) Google.
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Despite their involvement, these companies have denied any misconduct. Under the new agreement, the Justice Department will investigate Nvidia’s compliance with antitrust laws, while the FTC will look into the activities of OpenAI and Microsoft.
The deal was formalized over the past week and is expected to be completed soon.
Nvidia holds an estimated 80% of the AI chip market, benefiting from high gross margins due to its custom AI processors.
Earlier this year, the FTC demanded that major tech companies, including OpenAI, Microsoft, Alphabet, Amazon, and Anthropic, disclose details about their AI investments and partnerships.
The FTC is also investigating Microsoft’s $650 million deal with Inflection AI, suspecting it might be an attempt to bypass merger disclosure requirements.
Price Action: MSFT shares are trading lower by 0.07% at $424.28 in premarket at the last check Friday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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