After $13 bn in Investment, Microsoft's OpenAI Linkage Risks Scrutiny From US, UK Regulators | Tech News

After $13 bn in Investment, Microsoft's OpenAI Linkage Risks Scrutiny From US, UK Regulators

The US Federal Trade Commission is examining the nature of Microsoft Corp.’s investment in OpenAI Inc. and whether it may violate antitrust laws.

By:BLOOMBERG
| Updated on: Dec 09 2023, 06:35 IST
Microsoft to unveil new Copilot features! DALL-E 3 to GPT-4 Turbo, check benefits now
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1/6 Microsoft’s take on bringing AI services to their customer has drastically shifted over the years. First, the company introduced the generative AI tool called Bing Chat. Now, Microsoft has announced an umbrella of AI features under Microsoft Copilot. The company also announced the new upcoming features to the platform for 2024. (Microsoft)
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2/6 GPT-4 Turbo: Microsoft has revealed that the copilot will be integrated with OpenAI's latest model, GPT-4 Turbo. This will immensely benefit users to generate advanced responses along with managing complex and longer tasks. After the testing of the feature is complete, it will be rolled out to users in the coming weeks.  (Microsoft)
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3/6 Advanced DALL-E 3 Model: With  DALL-E 3, the copilot will be able to generate even higher-quality images. It is said to generate accurate images based on the prompts given to the system. The feature has already been available to users on Microsoft Paint. (Microsoft)
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4/6 Multi-Modal with Search Grounding: Microsoft is integrating the capabilities of GPT-4 to vision alongside Bing image search and web search data for better image interpretation and understanding. This will enable users to get better image queries. The feature will soon be made available to the users.  (Microsoft)
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5/6 Deep Search: With GPT-4, Deep search will enable users to get optimized search results for complex topics. The feature broadens search queries and provides more comprehensive descriptions with relevant results. (Microsoft)
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6/6 Additionally, there are two new features such as Inline Compose with rewrite menu which enable users to rewrite website data. The other feature is a Code Interpreter which is designed to perform complex tasks such as writing codes, data analysis, visualization, math and more.  (Microsoft)
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Microsoft didn’t report the transaction to the agency because the investment in OpenAI doesn’t amount to control of the company under US law. (AP)

 The US Federal Trade Commission is examining the nature of Microsoft Corp.'s investment in OpenAI Inc. and whether it may violate antitrust laws, according to a person familiar with the matter.

The inquiries are preliminary and the agency hasn't opened a formal investigation, according to the person, who asked not to be named discussing a confidential matter. 

Microsoft didn't report the transaction to the agency because the investment in OpenAI doesn't amount to control of the company under US law, the person said. OpenAI is a non-profit and acquisitions of non-corporate entities aren't reported under US merger law, regardless of value. Agency officials are analyzing the situation and assessing what its options are.

An FTC spokesperson declined to comment. Microsoft didn't immediately respond to a request for comment.

The UK's Competition and Markets Authority is also gathering information from stakeholders to determine whether the collaboration between the two firms threatens competition in the UK, home of Google's AI research lab Deepmind. The agency is taking comments until Jan. 3 before making a decision on a formal investigation.  

Microsoft has invested some $13 billion in OpenAI and integrated its products into its core businesses, quickly becoming the undisputed leader of AI among big tech firms and forcing Alphabet Inc.'s Google to scramble to catch up. 

FTC Chair Lina Khan has been vocal about concerns raised by AI technology and the agency is already scrutinizing some aspects. It has opened a consumer protection probe into into OpenAI, questioning whether its popular ChatGPT conversational AI bot puts consumers' reputations and data at risk. 

That probe into the Microsoft-backed startup marked the first official inquiry into a technology that has the potential to change almost every aspect of people's lives and has become almost equally fascinating for its potential to run awry. 

Khan has said enforcers “need to be vigilant early” with transformative tools like artificial intelligence. 

Khan also has Microsoft's growth in her sights. She's continuing the agency's challenge of the company's $69 billion acquisition of video game company Activision Blizzard Inc., which the agency is fighting on appeal.

The firing — and subsequent rehiring — of Sam Altman as chief of OpenAI last month exposed how closely tied the two companies have become. Microsoft shares fell as much as 2.4% immediately after OpenAI's board ousted Altman. Microsoft chief executive officer Satya Nadella personally helped negotiate and advocate for his return to the company — at one point offering to hire Altman himself, along with other employees at OpenAI who wanted to leave.

The move by the UK raises the question of whether antitrust regulators in other regions, namely the European Union and the US, will launch similar probes. When asked to comment on the CMA's move, a European Commission spokesperson said the regulator had been “following the situation of control over OpenAI very closely.”

 

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First Published Date: 09 Dec, 06:35 IST
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