The probes come as AI companies raised 40% of venture funding in May, with $12.5 billion invested across over 250 companies. If Microsoft and Nvidia withdraw from deals, venture funding could experience a downturn. The investigations follow Microsoft's $10 billion deal with OpenAI, the largest startup funding round of 2023 in any sector.
Key takeaways:
- The Federal Trade Commission is set to investigate Microsoft's relationship with OpenAI, while the Justice Department will probe Nvidia for potential antitrust law violations.
- Microsoft has been under regulatory scrutiny since its $10 billion deal with OpenAI, the largest startup funding round of 2023 in any sector.
- The FTC will also investigate Microsoft's deal with Inflection AI, where Microsoft paid the startup $650 million to license its AI software and hire most of its staff.
- These investigations could impact AI startups, as Nvidia and Microsoft, major investors in the sector, might move away from such deals due to regulatory scrutiny.