Excerpt: “The Federal Trade Commission today issued a staff report on the corporate partnerships and investments formed between the largest cloud service providers (CSPs)—Alphabet, Inc., Amazon.com, Inc., and Microsoft, Corp.—and two of the most prominent generative AI developers—Anthropic PBC and OpenAI OpCo, LLC. The report details key aspects regarding the structure of the CSP and AI developer partnerships, such as the equity and revenue-sharing rights retained by CSPs in these partnerships and certain consultation, control, and exclusivity rights CSPs gained through their investments with AI developers. The report outlines some potential competition implications, including that: the partnerships may impact access to certain inputs, such as computing resources and engineering talent; the partnerships may increase switching costs for the AI developer partners; and the partnerships provide CSP partners access to sensitive technical and business information that may be unavailable to others.”
Report
(43 pages)