Nidhish Waghmare
The US Federal Trade Commission (FTC) has requested further details from Amazon regarding its acquisition of top executives and researchers from AI startup Adept. This inquiry highlights the FTC’s growing concern over how deals in the AI sector are structured, particularly those involving major tech companies and innovative startups.
FTC’s Growing Focus on AI Deals
The FTC’s interest in Amazon’s deal with Adept, reported by a source to Reuters, reflects a broader review of partnerships between Big Tech companies and prominent AI startups. This inquiry comes on the heels of Amazon’s announcement last month about hiring Adept’s Chief Executive David Luan and other key personnel, along with licensing some of Adept’s technology.
The FTC’s request for information does not necessarily indicate an official investigation or enforcement action but shows an increased scrutiny of AI-related deals.
Amazon’s Race in the AI Space
Amazon is striving to keep pace with rivals Google and Microsoft in developing large language models. These models are designed to respond almost instantaneously to complex prompts or queries, making them invaluable in various applications. Amazon’s creation of the Artificial General Intelligence (AGI) team, which David Luan now heads, underscores its commitment to advancing in this field. This team, now branded as the “AGI Autonomy” team, consists largely of former Adept employees and reports to Rohit Prasad, the head of Amazon’s AGI team.
Founded in 2022, Adept quickly made headlines by raising over $400 million from venture capital investors, aiming to train large language models for enterprise clients. Despite its initial success and valuation exceeding $1 billion, Adept struggled to launch commercially successful products. Details about Amazon’s compensation to Adept investors or licensing fees remain undisclosed.
Comparison with Microsoft’s AI Ventures
This isn’t Amazon’s first significant move in the AI startup arena. Since September, Amazon has invested $4 billion in AI startup Anthropic, securing a minority stake. The FTC is also investigating a similar move by Microsoft, which recently hired much of Inflection AI’s leadership and employees, agreeing to pay around $650 million in licensing fees. The FTC is exploring whether these deals were strategies to bypass merger disclosure requirements.
FTC’s Broader AI Market Investigation
Earlier this year, the FTC launched a comprehensive study of investments and partnerships in the AI sector. The investigation demanded information about Microsoft’s relationship with OpenAI and Anthropic’s collaborations with Google and Amazon. This extensive request seeks to understand how partnerships between AI companies and Big Tech influence strategies, pricing, access to products and services, and personnel decisions.
Antitrust enforcers have expressed concerns that Big Tech companies might leverage their advantages in AI to stifle competition from smaller firms. The FTC and the Justice Department are monitoring potential antitrust issues involving major players like Microsoft, OpenAI, and Nvidia.
The FTC’s scrutiny of Amazon’s deal with Adept underscores the regulator’s heightened vigilance over AI-related acquisitions and partnerships. As Big Tech companies continue to expand their AI capabilities, the FTC’s actions reflect a commitment to ensuring competitive fairness and transparency in the rapidly evolving AI landscape.
GIPHY App Key not set. Please check settings