It's being reported this afternoon that the US Federal Trade Commission is moving ahead with a sprawling antitrust probe of Microsoft Corp. that was opened in the waning days of the Biden Administration, signaling that Donald Trump’s new FTC Chair Andrew Ferguson is going to prioritize scrutiny of tech giants.

FTC staff in recent weeks have continued to work on the investigation, meeting with companies and other groups to gather information, according to people familiar with the matter, who asked not to be named discussing a confidential investigation.

The FTC sent Microsoft a so-called civil investigative demand, which is similar to a subpoena, late last year. The document, a copy of which was viewed by Bloomberg, compels the company to turn over reams of data about its AI operations, including the cost to train models and obtain data, going as far back as 2016. The agency sought details about Microsoft’s data centers, its struggles to find enough computing power to meet customer demand and the company’s software licensing practices.

The FTC is also scrutinizing Microsoft’s decision to slash funding on its own artificial intelligence projects after striking a deal with OpenAI, which could be perceived as hurting competition in the burgeoning AI market.

OpenAI Investment

Despite the hefty sum, Microsoft didn’t disclose its investment to competition regulators ahead of time, and the FTC also has been investigating whether the deal was structured as a partnership to avoid a merger investigation, Bloomberg has reported.

When Microsoft first invested in OpenAI in 2019, the startup was a promising research lab looking for a way to fund the cloud-computing power required to create AI models. Microsoft started with a $1 billion infusion after co-founder Musk withdrew his backing. Microsoft had been working on various AI projects of its own for more than two decades and feared it was falling behind rival Google. 

The company’s efforts were scattered across several divisions and not producing the results Chief Executive Officer Satya Nadella had hoped for. In 2023, one month after pumping an additional $10 billion into OpenAI, Microsoft began unveiling a series of products infused with OpenAI technology. Microsoft pulled back on its internal effort to develop the technology, which raised a red flag for the FTC.

Seeking Details

The agency said in the information demand that it wants to determine whether Microsoft’s profits from other parts of the business give it an edge over other AI companies. The agency also said it wants details about Microsoft’s data center capacity constraints to better understand the costs behind cloud-computing services. Those details will help the agency determine whether to bring a case.

Since receiving the FTC demand, Microsoft may have sought to narrow the scope of the information it’s being asked to turn over — a typical move by companies being probed by the agency. Such wide-ranging antitrust investigations can take years and don’t always result in the agency bringing a case.

“We are working cooperatively with the agency,” said Alex Haurek, a Microsoft spokesman. The FTC didn’t respond to a request for comment. For more on this, review the full report at BNN Bloomberg.

I guess that $1 million donation for Trump's inauguration wasn't worth it.