Antitrust and Innovation Competition: Investments and Partnerships in Artificial Intelligence

The Federal Trade Commission (FTC) issued orders to Alphabet (Google), Amazon, Microsoft, OpenAI, and Anthropic requesting information regarding investments and partnerships in artificial intelligence (AI). The FTC expressed concerns about potential harm to innovation and competition. I point out that investments and partnerships are an alternative to Mergers and Acquisitions (M&A) and vertical integration. I argue that these investments and partnerships are not likely to diminish innovation or competition in either cloud computing or AI. Antitrust policymakers should not discourage investments and partnerships based on hypothetical effects on future innovation. I conclude that investments and partnerships can make important contributions to innovation competition and the market for technology.