Source: FTC inquiring about Amazon’s partnership with AI startup Adept, according to reports – One America News Network
July 16, 2024 – 8:09 AM PDT
(Reuters) – The U.S. Federal Trade Commission has asked Amazon.com (AMZN.O) to provide more details on its deal to hire top executives and researchers from artificial intelligence startup Adept, a person familiar with the matter told Reuters.
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The request reflects the FTC’s growing concern about how AI deals have been put together and follows a broader review of partnerships between Big Tech and prominent AI startups.
The informal inquiry into Amazon, which has not previously been reported, centers on last month’s announcement that Adept Chief Executive David Luan and others were leaving to join Amazon, which would also license some of the startup’s technology.
Such inquiries do not necessarily result in an official investigation or enforcement action.
Amazon is trying to catch up with rivals Google (GOOGL.O) and Microsoft (MSFT.O), which partners with OpenAI, in developing its own large language models that can respond almost instantaneously to complicated prompts or queries.
Reuters previously reported on Amazon’s efforts to establish a new organization called the Artificial General Intelligence (AGI) team, focused on developing large language models. Luan is now running the “AGI Autonomy” team, consisting of many former Adept employees, and reporting to Rohit Prasad, head of the AGI team.
Founded in 2022, Adept made a splash by raising over $400 million from venture capital investors with the aim to train large language models to perform general tasks for enterprise clients. Once valued at over $1 billion, it released some open-source models but failed to launch successful commercial products. It’s unclear whether Amazon has compensated Adept investors, or the details of the licensing fees.
Amazon, Adept and the FTC declined to comment.
The regulator is already investigating a similar move by Microsoft, which hired away much of another startup, Inflection AI’s leadership and employees and agreed to pay a roughly $650 million licensing fee. The FTC is looking into whether the deal was a play to skirt merger disclosure requirements, a source told Reuters last month.
This is not Amazon’s first AI startup bet. Amazon has invested $4 billion in AI startup Anthropic since September, taking a minority stake in the San Francisco company.
The FTC earlier this year launched a study of investments and partnerships in the AI space, demanding information on Microsoft’s relationship with OpenAI, and Anthropic’s tie ups with Google (GOOGL.O) and Amazon.
The extensive document request, made in January, seeks details on how AI company partnerships with Big Tech influence strategy, pricing decisions, access to products and services, and personnel decisions.
U.S. antitrust enforcers also expressed concern about Big Tech companies wielding their existing advantages in AI to shut out smaller competitors. The FTC and Justice Department have staked out responsibility for potential probes into Microsoft, OpenAI and chipmaker Nvidia.
Reporting by Krystal Hu and Greg Bensinger in San Francisco, Jody Godoy in New York; Editing by Kim Coghill
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