According to a recent FTC report, Big Tech's growing investments in AI startups, such as Microsoft's $13 billion funding of OpenAI and Amazon's and Google's partnerships with Anthropic, are raising alarms about potential monopolization and competitive risks in the AI and cloud computing sectors. One of the major FTC concerns is the so-called 'circular spending' practice, under which startups spend their received money on services their investors offer, notes Bloomberg.
Training artificial intelligence models requires a lot of computing power that usually costs billions of dollars, an amount of money that startups like Open AI and Anthropic do not have and can barely rise. As a result, they turn to Big Tech companies with billions of dollars and massive amounts of computing power. For obvious reasons, companies like Amazon, Google, and Microsoft try to capitalize on their deals with AI companies, which usually means exclusivity. Also, tech giants want their partners to spend the money they receive on products and services these companies offer.
