FTC Investigates Microsoft’s Inflection AI Deal

The Federal Trade Commission is investigating Microsoft’s recent deal with Inflection AI, an artificial intelligence startup, to determine if the tech giant structured the agreement to avoid antitrust review, according to the Wall Street Journal. In March, Microsoft hired Inflection AI’s co-founder and CEO, Mustafa Suleyman, along with nearly all of the startup’s employees, in a move valued at $650 million. Despite the substantial investment, Microsoft did not acquire any equity in Inflection AI or its intellectual property, which would have triggered antitrust oversight. The FTC has reportedly requested details on the deal’s negotiation, aiming to ascertain if Microsoft orchestrated it to gain control of Inflection AI without facing regulatory scrutiny.

The investigation is part of broader efforts to scrutinize the dominance of big tech companies in the AI sector. The agreement with Inflection AI is one of several deals under regulatory review. The FTC’s inquiry into Microsoft’s deal comes amid separate antitrust investigations into Microsoft, OpenAI, and Nvidia, focusing on their actions in the AI industry. The Justice Department is reportedly examining Nvidia to determine if the company’s practices violate antitrust laws. Meanwhile, the FTC is leading the investigations into Microsoft and OpenAI, where Microsoft holds a significant stake.

The outcome of the FTC’s investigation could have significant implications for Microsoft. If it is found that Microsoft structured the deal to avoid antitrust review, the FTC could impose fines and potentially block the agreement. This investigation highlights growing concerns about the power and influence of big tech companies in the AI sector and broader tech industry.