Following UK regulators’ probe, the Federal Trade Commission (FTC) is inspecting Microsoft’s (MSFT) relationship with and investment in artificial intelligence developer OpenAI, according to Bloomberg.
Yahoo Finance Tech Editor Dan Howley breaks down the antitrust commentary surrounding Big Tech’s adoption of AI
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Video Transcript
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JULIE HYMAN: Microsoft’s partnership with GPT maker OpenAI under scrutiny from antitrust regulators in the UK. And this coming as the FTC is now reportedly examining the nature of Microsoft’s investment in OpenAI, that’s according to “Bloomberg.” Here to discuss , Yahoo Finance’s Dan Howley. So Microsoft, sort of, seems to be saying, well, we don’t have control over OpenAI, so it’s OK.
DAN HOWLEY: Yeah, that’s right, Julie. They own 49% of OpenAI. They have a non-voting observer seat on the board of OpenAI. That was after Sam Altman returned to the company following his ouster. And so yeah, as far as they’re concerned, they don’t have any real leadership role at the company at all.
JOSH LIPTON: And Dan, so where do we expect this to go from here?
DAN HOWLEY: It’s going to be difficult. I mean, the main thing here is that the Competition and Markets Authority in the UK is trying to examine specifically if there’s a relevant merger situation going on between Microsoft and OpenAI, meaning is this tie up bigger than just an investment? Is Microsoft really, kind of– is OpenAI really, kind of, an arm of Microsoft at this point?
They are using a lot of their software in their Copilots. They are marketing themselves as the big backer of OpenAI. OpenAI CEO Sam Altman was almost hired by Microsoft. Satya Nadella reached out and said that they would hire him. And most of the staff of OpenAI was willing to go to Microsoft during the ouster that had occurred.
So the CMA is looking into this now. And then as you pointed out earlier, Julie, the FTC is now sniffing around trying to determine if there’s some kind of practice going on between the two that could be untoward. So they’re both investigating.
Nothing is, you know, fact now. There’s no wrongdoing or anything along those lines. But it is– if you’re looking at Microsoft, you’re looking at OpenAI, you just got past this shake up at the highest levels of the company and now you have antitrust regulators circling.
JULIE HYMAN: Yeah, and speaking of that shakeup, it’s also interesting because the circling is happening at the same time that there are increasing media reports trying to shed some light on what really happened during that shakeup at OpenAI because it still seems pretty opaque. “The Washington Post,” the latest today, it’s out with a story looking at what kind of manager Sam Altman has been. And you have to wonder how that might also circle back and reflect on these investigations as we try to figure out what happened.
DAN HOWLEY: Yeah, these reports from the “Post” basically saying, you know, that Sam Altman had played employees against each other, that there was a toxic environment, that there were issues with board members. Specifically, a board member who had submitted a report that was critical of OpenAI and then there was back and forth and acrimonious relationship with the board member and Sam Altman. So there’s this starting to get some idea of what was going on there beyond just the Altman wanted to push the, kind of, product of AI over the safety that OpenAI had, kind of, been pushing.
So yeah, there’s more coming to light. And you know, I believe it was Amazon had spoken out basically saying, look, we have multiple companies doing AI work with us. We’re not beholden to just one. Basically, I mean, you know, it’s clearly a slap at Microsoft and OpenAI. So if you’re Microsoft at this point, you’re seeing these reports, you’re seeing that there’s regulators looking around, I mean, the investment at OpenAI, the $10 billion over several years, there’s certainly got to be questions about what’s going on there now.
JOSH LIPTON: All right, Dan Howley, thank you, as always, for joining us. Have a great weekend.
