FTC Probes Microsoft’s AI Operations and Licensing Practices

The Federal Trade Commission (FTC) is ramping up its antitrust investigation into Microsoft’s AI business, signaling increased scrutiny of the tech giant’s dominance. According to Bloomberg, the probe will be led by newly appointed FTC Chair Andrew Ferguson, a Trump-era pick known for his focus on competition law.

Last year, former FTC Chair Lina Khan initiated the investigation, requiring Microsoft to disclose key details about its AI models. The agency demanded information on how the training data was sourced, as well as the costs involved in training the AI. The FTC requested data dating back to 2016.

What is the FTC investigating Microsoft?

The FTC is also looking into why Microsoft reduced funding for its in-house AI projects after partnering with OpenAI. The company invested a massive $13 billion in the partnership, raising concerns about whether it properly disclosed this investment to regulators on time.

Additionally, the FTC is seeking details about Microsoft’s data centers and the difficulties in securing enough computing power to meet customer demand. Regulators are reviewing the company’s cloud software licensing practices, which competitors argue create unfair barriers. The agency will also assess whether Microsoft’s other business operations give it an unfair advantage in the AI market.

FTC expands investigations into major tech firms

The new FTC Chair Ferguson has emphasized that investigating big tech companies is a top priority. The federal agency is also investigating whether Amazon has used deceptive tactics to lock customers into its Prime memberships that are difficult to cancel.

Microsoft is currently cooperating with the FTC in this ongoing antitrust investigation. However, there are indications that Microsoft might attempt to limit the scope of information provided to the federal agency. This investigation could potentially lead to formal charges against Microsoft if the agency finds any evidence of antitrust violations.