As a part of a broader FTC investigation, Google has reportedly urged the U.S. trade regulator to kill Microsoft’s exclusive agreement to host OpenAI’s AI technologies over its cloud, including its chatbot ChatGPT, reports The Information.
Google’s appeal comes amidst an ongoing FTC investigation into Microsoft’s broader business practices. The federal agency is exploring whether Microsoft’s bundling of services, such as Azure cloud hosting and integrations with OpenAI technology, constitutes anticompetitive behavior. This comes at a time when there is increased scrutiny into the market power of major tech companies (Big Tech firms) and to ensure fair competition within the industry.
Many allege, that Microsoft’s exclusivity agreement with OpenAI has drawn criticism for limiting the availability of advanced AI models to competing cloud service providers. By tying OpenAI’s technologies to Azure, Microsoft effectively forces customers to rely on its servers, something that can potentially stifle competition in the rapidly-growing AI sector.
Central to Google’s argument is the claim that Microsoft’s exclusivity deal imposes additional costs on customers seeking to access OpenAI’s technologies. Businesses that purchase tools like ChatGPT through Microsoft may face higher expenses if they are not already using Azure as their primary cloud provider. This pricing structure, Google contends, could discourage customers from choosing alternative cloud platforms such as Google Cloud or Amazon Web Services (AWS). Google and other critics argue that such practices could harm innovation and consumer choice in the AI ecosystem. If only Microsoft’s servers are permitted to host OpenAI’s models, customers could be pressured to shift their operations to Azure, resulting in a less diverse and less accessible AI landscape.
For Microsoft, its partnership with OpenAI represents a calculated move to solidify its position as a leader in AI, moving past rivals like Google and Amazon. To date, the tech giant has invested billions of dollars in OpenAI, leveraging its cutting-edge models to enhance its services, including Azure, Microsoft Office, and Bing, and integrate OpenAI’s capabilities into its ecosystem. However, this aggressive strategy has sparked concerns about market concentration and the potential for monopolistic practices. Critics worry that Microsoft’s exclusivity agreement could hinder other cloud providers from competing effectively.
