The U.S. Federal Trade Commission (FTC) has requested Amazon.com (AMZN.O) to provide additional details about its recent deal involving the hiring of top executives and researchers from the artificial intelligence startup Adept, a source familiar with the situation told Reuters. This request highlights the FTC’s growing concern about the structure of AI-related deals and is part of a broader review of partnerships between Big Tech companies and prominent AI startups.
The informal inquiry into Amazon, which had not been previously reported, focuses on last month’s announcement that Adept’s Chief Executive David Luan and others would be joining Amazon. Additionally, Amazon would be licensing some of Adept’s technology. Such inquiries do not necessarily lead to formal investigations or enforcement actions.
Amazon aims to catch up with rivals Google (GOOGL.O) and Microsoft (MSFT.O), which partners with OpenAI, by developing its own large language models capable of responding almost instantaneously to complex prompts or queries.
Amazon’s efforts include establishing a new organization called the Artificial General Intelligence (AGI) team, dedicated to developing large language models. Luan now leads the “AGI Autonomy” team, which comprises many former Adept employees and reports to Rohit Prasad, head of the AGI team.
Founded in 2022, Adept garnered attention by raising over $400 million from venture capital investors to train large language models for general enterprise tasks. Once valued at over $1 billion, Adept released some open-source models but failed to launch successful commercial products. It remains unclear whether Amazon has compensated Adept investors or the specifics of the licensing fees.
Amazon, Adept, and the FTC declined to comment on the matter. The FTC is also investigating a similar move by Microsoft, which hired much of another startup, Inflection AI’s leadership and employees, and agreed to pay a roughly $650 million licensing fee. The FTC is examining whether the deal was an attempt to bypass merger disclosure requirements, a source told Reuters last month.
This isn’t Amazon’s first investment in an AI startup. Since September, Amazon has invested $4 billion in the AI startup Anthropic, acquiring a minority stake in the San Francisco-based company.
Earlier this year, the FTC launched a study of investments and partnerships in the AI space, demanding information on Microsoft’s relationship with OpenAI, and Anthropic’s collaborations with Google and Amazon. The extensive document request made in January seeks details on how AI company partnerships with Big Tech influence strategy, pricing decisions, access to products and services, and personnel decisions.
U.S. antitrust enforcers have also expressed concern about Big Tech companies leveraging their existing advantages in AI to exclude smaller competitors. The FTC and the Justice Department have indicated their responsibility for potential probes into Microsoft, OpenAI, and chipmaker Nvidia.
