In an effort to prevent tech giants from wielding their power to stifle competition in the fast-paced world of artificial intelligence (AI), U.S. antitrust enforcers are preparing to launch investigations into Microsoft, OpenAI, and Nvidia. The Federal Trade Commission (FTC) and Justice Department have reached an agreement that will pave the way for unprecedented regulatory scrutiny of these companies’ conduct in the AI race.

The details of the deal, which is expected to be finalized soon, have not been made public. However, an anonymous source familiar with the matter revealed that the FTC and DOJ plan to divide oversight responsibilities. The DOJ will investigate Nvidia, whose advancements in AI chip manufacturing have positioned it as the second-largest publicly traded company in the United States. On the other hand, the FTC will take the lead in probing Microsoft and OpenAI, the creators of the popular ChatGPT chatbot.

By resolving a long-standing deadlock over the oversight of AI companies, this deal eliminates a major roadblock that has hindered the federal government’s ability to respond effectively to the rapidly changing corporate landscape. The FTC and DOJ will now have the opportunity to closely examine the practices and behavior of these tech giants.

Alongside this agreement, the FTC has launched an investigation into whether Microsoft intentionally structured its $650 million deal with AI company Inflection to bypass government antitrust reviews. Under federal laws, mergers exceeding $119 million must be reported to federal agencies. The FTC aims to determine if Microsoft manipulated the deal structure to evade scrutiny.

Microsoft spokesperson, Becca Dougherty, defended the company’s actions, stating that their agreements with Inflection were in line with legal obligations. She emphasized Microsoft’s compliance with the reporting requirements under the HSR Act, expressing confidence in the company’s adherence to the law.

As the investigations unfold, both Nvidia and OpenAI have refrained from commenting on the matter. It remains to be seen how these probes will impact the future trajectory of these prominent players in the AI industry.

The New York Times first reported the agreement between the DOJ and FTC, while the Wall Street Journal was the first to report the FTC’s probe into Microsoft’s Inflection deal.