The Federal Trade Commission (FTC) has launched a preliminary inquiry into Microsoft's investment in OpenAI, according to a Bloomberg report. The agency is examining whether this investment violates US antitrust laws. The investigation comes in the wake of concerns raised by FTC Chair Lina Khan about the market dominance of large incumbent technology firms through the expanding adoption of AI.

OpenAI, led by Sam Altman, captured the attention of UK regulators as well. The UK's Competition and Markets Authority (CMA) announced that it is considering investigating the partnership between OpenAI and Microsoft, taking into account recent developments, including the drama surrounding Altman's ousting and subsequent re-hiring, in which Microsoft played a significant role.

While the FTC inquiry is in its early stages and no formal investigation has been opened, Khan and her team are carefully reviewing the situation and assessing their options. However, the non-profit status of OpenAI poses complications for regulation, as transactions involving non-corporate entities are not legally required to be reported.

Microsoft's $13 billion investment in OpenAI does not grant it control over the company under current legal definitions. Yet, the involvement of Microsoft in the recent management changes at OpenAI suggests a level of influence beyond what may be perceived solely based on technicalities.

The CMA expressed its intention to review whether the partnership between OpenAI and Microsoft has amounted to an acquisition of control. In its news release, the CMA stated that it will assess whether one party now holds material influence, de facto control, or over 50% of the voting rights over the other entity.

Chair Lina Khan, who has also voiced concerns about Microsoft's $69 billion Activision Blizzard acquisition, has consistently emphasized the need for AI regulations. She has stressed that despite the novelty of AI technologies, they should not be exempt from existing rules, and the FTC is committed to enforcing laws to maintain open, fair, and competitive markets while preventing the mass exploitation of users.

As OpenAI gains prominence and the influence of AI technology proliferates, regulatory bodies on both sides of the Atlantic are keen to ensure that competition and fair practices are upheld while guarding against any potential antitrust violations. The outcome of these investigations will have significant implications for the future of AI and the balance of power within the industry.