Microsoft is facing a pair of new antitrust probes from the Federal Trade Commission, according to reports Wednesday evening from The New York Times and Wall Street Journal.
The FTC is seeking information about Microsoft’s hiring of AI pioneer Mustafa Suleyman and colleagues from Inflection AI earlier this year, the Journal reported, citing sources and records. The agency is investigating whether Microsoft structured a deal to gain control of Inflection without going through an FTC review.
Microsoft reportedly paid around $650 million to Inflection in a licensing deal. The company, which is still operating as an independent entity, is known for its large language model and AI chatbot Pi.
Suleyman, the co-founder of DeepMind and a former Google vice president of artificial intelligence, is leading a new organization called Microsoft AI.
Microsoft’s deal with Inflection could be suspended if the FTC finds that the Redmond tech giant should have reported and sought government review of the acquisition, according to the Journal.
“Our agreements with Inflection gave us the opportunity to recruit individuals at Inflection AI and build a team capable of accelerating Microsoft Copilot, while enabling Inflection to continue pursuing its independent business and ambition as an AI studio,” Microsoft said in a statement to GeekWire. “We take our legal obligations to report transactions under the HSR Act seriously and are confident that we have complied with those obligations.”
Meanwhile, a separate report from The New York Times reveals that the Justice Department and FTC inked a new deal to pursue an antitrust investigation into the “dominant roles” that Microsoft, OpenAI, and Nvidia play in the AI industry.
The FTC will take the lead on investigating both OpenAI and Microsoft. The two companies are close partners; Microsoft has invested more than $13 billion into the Bay Area company, which provides technology that powers AI features in many Microsoft products. OpenAI runs its services on Microsoft’s Azure cloud platform.
The FTC in January launched a separate inquiry into Microsoft’s investment in OpenAI, as well as Amazon’s investment into Anthropic, another hot AI startup.
Microsoft declined to comment on the New York Times report.
Editor’s note: Story updated with comments from Microsoft.
