In a sign of rising federal scrutiny on the artificial intelligence industry, the U.S. Justice Department (DoJ) and the Federal Trade Commission (FTC) have struck a deal to proceed with antitrust investigations into Microsoft (NASDAQ:MSFT), OpenAI, and Nvidia’s (NASDAQ:NVDA) roles in the AI industry, according to an exclusive New York Times report. The Justice Department and the FTC’s deal is expected to be finalized soon.
Under the deal, the DoJ will investigate whether Nvidia violated antitrust laws, while the FTC will examine OpenAI and Microsoft. Although OpenAI’s parent is a non-profit, it is backed by Microsoft, which has invested $13 billion for a 49% stake in the company.
Rising Regulatory Scrutiny of the AI Industry
The AI industry is increasingly under scrutiny by regulators. In January, the FTC ordered OpenAI, Microsoft, Alphabet (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), and Anthropic to disclose details on AI investments and partnerships involving generative AI and cloud services. Last year, the FTC began investigating OpenAI for potential violations of consumer protection laws, as it could have put the personal data of consumers at risk.
According to a WSJ report, Microsoft is also under investigation by the FTC for its $650 million deal with AI startup Inflection AI.
Is Microsoft a Buy or Sell Stock?
Analysts remain bullish about MSFT stock, with a Strong Buy consensus rating based on 32 Buys and one Hold. Over the past year, MSFT has increased by more than 20%, and the average MSFT price target of $491.90 implies an upside potential of 16% from current levels.
