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FTC report scrutinizes OpenAI’s and Anthropic’s partnerships with cloud giants

Complicated, opaque partnerships raise concerns of competition and fair business practices in a fast-moving industry.

1/17/25 4:02PM

On the last working day of Lina Khan’s FTC, the agency announced the release of a report that examines the terms of three of the largest deals between AI companies and cloud-computing giants, after requesting information from the parties in January 2024. The deals examined:

Microsoft’s $13.75 billion investment in OpenAI
Amazon’s $8 billion investment in Anthropic
Google’s $2.55 billion investment in Anthropic

The agency requested nonpublic details of the partnerships from the companies, as part of the agency’s effort to monitor competition and power dynamics in the fast-moving AI industry.

In the announcement, outgoing FTC chair Lina Khan wrote:

“As companies rapidly deploy generative AI technologies, enforcers and policymakers must stay vigilant to guard against business strategies that undermine open markets, opportunity, and innovation. The FTC’s report sheds light on how partnerships by big tech firms can create lock-in, deprive start-ups of key AI inputs, and reveal sensitive information that can undermine fair competition.”

Microsoft’s partnership with OpenAI, for example, contains many elements that could have huge implications for the industry. The deal calls for Microsoft’s to be the “exclusive cloud provider” for OpenAI’s computing needs and for Microsoft to build a massive supercomputer “in collaboration with and exclusively for OpenAI.”

Recently, The Information reported that key terms of this deal were still being negotiated, including Microsoft’s equity stake in OpenAI, and the definition of the moment when OpenAI actually achieves “artificial general intelligence” (which would signal the end of the deal).

The redacted report examined the terms of the deals, including equity and revenue sharing, exclusivity rights, infrastructure spending commitments, the sharing of key employees, and the exchange of proprietary technology and sensitive business information. The report also examined how many of the cloud providers are starting to work on their own specialized GPUs to reduce dependence on industry AI-chip leader Nvidia.

The report listed some areas of concern that should continue to be scrutinized, such as a cloud-service provider deciding to sell its services only to its partners, or one partnership affecting the availability of AI engineering talent.

Jon Keegan4h

WSJ: OpenAI plans Q4 IPO in race to be the first AI startup to enter public markets

OpenAI was the first to the generative AI market with ChatGPT, and now it hopes to be the first of its AI startup cohort to pull off an initial public offering, according to a report from The Wall Street Journal. The $500 billion startup is in a race against its $350 billion competitor Anthropic to IPO, who has also been exploring one.

According to the report, OpenAI is in talks with banks to try for a fourth-quarter IPO this year, which has the potential to be one of the largest IPOs ever, in a year that is expected to see many record breaking tech companies make tap into public markets to raise massive new rounds of capital.

Ahead of a potential public listing, OpenAI is reportedly attempting to raise a massive round of private investment. The company is reportedly aiming to raise $100 billion, with Amazon potentially accounting for up to half that target. Other investors in talks with OpenAI over the private fundraising round include Nvidia, Microsoft, and SoftBank.

Exclusive | OpenAI Plans Fourth-Quarter IPO in Race to Beat Anthropic to Market

Rani Molla5h

SpaceX is actually considering a merger with Tesla or xAI: Report

Bloomberg reports that Elon Musk’s SpaceX is considering merging with Musk’s Tesla. Earlier today, Reuters had reported that SpaceX was thinking of potentially merging with xAI ahead of SpaceX’s IPO this year.

From Bloomberg:

“The firm has discussed the feasibility of a tie-up between SpaceX and Tesla, an idea that some investors are pushing, the people said, asking not to be identified as the information isn’t public. Separately, they are also exploring a tie-up between SpaceX and xAI ahead of an IPO, some of the people said.”

Musk’s companies already have numerous relationships between themselves, including most recently Tesla’s $2 billion investment in xAI. At Tesla’s shareholder meeting last year, shareholders voted to invest in the company but the board didn’t approve the measure due to significant abstentions.

In 2024, SpaceX incurred about $2.4 million in expenses under commercial, licensing, and support agreements with Tesla, and Tesla incurred about $800,000 in expenses for Musk’s use of SpaceX’s jet.

Elon Musk’s SpaceX Is Said to Consider Merger With Tesla or xAI

From Bloomberg:

“The firm has discussed the feasibility of a tie-up between SpaceX and Tesla, an idea that some investors are pushing, the people said, asking not to be identified as the information isn’t public. Separately, they are also exploring a tie-up between SpaceX and xAI ahead of an IPO, some of the people said.”

Rani Molla

APPLE OF MY AI

Apple posts record quarterly revenue and iPhone sales

But all eyes will be on margins and AI.

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WSJ: Amazon considering $50 billion investment in OpenAI

What a difference half a day makes. Earlier today, The Information reported that Amazon was considering investing roughly $10 billion to $20 billion in OpenAI as part of a $60 billion fundraising round alongside Nvidia and Microsoft. Now The Wall Street Journal is reporting the e-commerce giant could invest up to $50 billion in the ChatGPT maker as part of a larger, $100 billion funding round. The Financial Times also earlier reported today a $100 billion funding round but with smaller amounts from Nvidia, Microsoft, and Amazon.

Exclusive | Amazon in Talks to Invest Up to $50 Billion in OpenAI

Rani Molla8h

Elon Musk’s SpaceX reportedly in talks to merge with xAI

Tesla CEO Elon Musk is reportedly exploring a merger between SpaceX and his artificial intelligence startup, xAI, a move that would bundle rockets, satellites, the social media site X, and AI under one company ahead of SpaceX’s long-anticipated IPO.

According to Reuters reporting, the deal would swap xAI shares for SpaceX stock, potentially valuing the combined operation north of $1 trillion.

Reuters reports:

“Two entities have been set up in Nevada to facilitate the transaction, the person said.

Reuters could not determine the value of the deal, its ‌primary rationale, or its potential timing.

Corporate filings in Nevada show that those entities were set up on January 21. One of them, a limited liability company, lists SpaceX and Bret Johnsen, the company’s chief financial officer, as managing members, while the other lists Johnsen as the company’s only officer, the filings show.”

The combined companies could also set the narrative groundwork for putting data centers in space — an idea that Musk and a number of other tech billionaires have been floating lately but that may not get off the ground.

In its earnings filings yesterday, Tesla disclosed that it recently made a $2 billion investment in xAI. Last year, Musk’s xAI bought Musk’s X in an all-stock deal.

Exclusive: Musk's SpaceX in merger talks with xAI ahead of planned IPO, source says