Microsoft’s OpenAI deal, AI software sales targeted by FTC probe – report

The U.S. Federal Trade Commission officials have been asking rivals of Microsoft (NASDAQ:MSFT) about the impact of its artificial intelligence deals as part of its antitrust investigation into the tech giant, The Information reported on Tuesday, citing people involved in discussions.

The FTC is specifically asking about Microsoft’s deal with OpenAI which grants the tech giant the exclusive right to run the AI- startup’s models on its cloud servers, along with a cut of OpenAI’s revenue, the report said.

According to the report, the FTC has also questioned rivals about how Microsoft sells its OpenAI-infused Copilot software and how it resells OpenAI’s models to developers on its Azure cloud computing platform.

The questions imply that the FTC might be probing whether Microsoft’s dominance in the cloud computing market has given the company an unfair advantage in sales of AI software, the report added.

Microsoft declined to comment on the Information report and redirected to the company’s competition and market regulation head, Rima Alaily’s LinkedIn post from earlier in the day.

According to Alaily’s post, Microsoft has sent a letter to the FTC Inspector General asking him to investigate whether the FTC management improperly leaked confidential information about the potential antitrust investigation last week, in violation of the agency’s ethics rules and rules of practice.

OpenAI and the FTC did not immediately respond to a Seeking Alpha’s request for comment on the report.

The FTC’s wide-ranging antitrust investigation on Microsoft was first reported by Bloomberg, which said that the agency had sent the company a request, demanding the tech giant to release detailed information on company policy.

Last month, it was reported that the FTC was looking into whether Microsoft has abused its power in the productivity software market by making it harder — or preventing altogether — customers from moving their data on Microsoft’s Azure cloud to competitors.

Issues included potentially increasing subscription fees for customers that leave, charging exit fees, and making Office 365 software incompatible with other clouds.

This story has been updated to add Microsoft’s response.