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Tuesday, Feb 18, 2025
Mugglehead Investment Magazine
Alternative investment news based in Vancouver, B.C.

AI and Autonomy

Two United States regulators team up on antitrust investigation into AI

The push towards accountability for the AI space could potentially be curtailed with the arrival of a Trump presidency

Two United States regulators team up on antitrust investigation in AI
Image from Rick Bowmer via the AP.

The Federal Trade Commission and Justice Department are joining forces on an investigation into the biggest players in the artificial intelligence space.

Announced late last week, the DOJ will investigate how Nvidia (NASDAQ: NVDA) has received such a dominant market share in the AI chip market, while the FTC will open an investigation into OpenAI and Microsoft Corporation (NASDAQ: MSFT).

Microsoft invested USD$13 billion into OpenAI in exchange for a some of its profits, and the suspicion shared by both regulators involves whether these firms have acquired too much of a competitive advantage.

Regulators are increasingly paying attention to AI in Europe, with privacy being the key focus.

Austrian activist-lawyer Max Schrems shifted his attention to AI in April. Schrems has successfully tackled Meta Labs (NASDAQ: META) over various privacy violations in the past.

Schrems’s privacy nonprofit Noyb filed an official complaint against OpenAI, alleging that ChatGPT’s hallucinations violate the EU General Data Protection Regulation (GDPR) by disseminating incorrect information about individuals. Now Schrems is targeting his usual adversary.

“Meta is basically saying that it can use ‘any data from any source for any purpose and make it available to anyone in the world’, as long as it’s done via ‘AI technology,’” said Schrems.

“This is clearly the opposite of GDPR compliance.”

Meta recently changed its European privacy policy to allow the company to use people’s public personal posts, media, and data from other online sources for an unspecified “AI technology” that can share data with third parties.

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Investigations may not survive a Trump presidency

Noyb claims this violates the GDPR in several ways. Subscribers can opt out of this data usage but do not have the option to provide proper consent through an opt-in. Additionally, there is no clear method for users to have their data deleted once it is in the system.

If the investigation leads to federal lawsuits, they will contribute to Biden’s legacy of challenging Big Tech through antitrust actions, drawing global regulatory attention.

However, a Trump presidency could potentially curtail the push towards accountability for the AI space. Investigations will still be in early stages in November, and a new administration would likely see the departure of aggressive enforcers Jonathan Kanter and Lina Khan.

Regardless, the FTC and DOJ have divided their AI targets and will open official probes into Nvidia and the alliance between Microsoft and OpenAI.

This will require the companies to respond to wide-ranging subpoenas seeking detailed information about their business practices and relationships with both partners and competitors. The agencies will also likely issue subpoenas to many of these partners and competitors to determine how, or whether, competition is being harmed in the AI sector.

 

Verses AI is a sponsor of Mugglehead news coverage

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