FTC Scrutinizes Amazon's AI Deal with Startup Adept Amid Big Tech Concerns

FTC seeking details on Amazon deal with AI startup Adept, source says

The U.S. Federal Trade Commission has asked Amazon.com to provide more details on its deal to hire top executives and researchers from artificial intelligence startup Adept, a person familiar with the matter told Reuters. The request reflects the FTC's growing concern about how AI deals have been put together and follows a broader review of partnerships between Big Tech and prominent AI startups. The informal inquiry into Amazon, which has not previously been reported, centers on last month's announcement that Adept Chief Executive David Luan and others were leaving to join Amazon, which would also license some of the startup's technology. Such inquiries do not necessarily result in an official investigation or enforcement action. Amazon announces incremental AI refinements to fend off rivals (For top technology news of the day, subscribe to our tech newsletter Today's Cache) Amazon is trying to catch up with rivals Google and Microsoft, which partners with OpenAI, in developing its own large language models that can respond almost instantaneously to complicated prompts or queries. Reuters previously reported on Amazon's efforts to establish a new organization called the Artificial General Intelligence (AGI) team, focused on developing large language models. Luan is now running the "AGI Autonomy" team, consisting of many former Adept employees, and reporting to Rohit Prasad, head of the AGI team. Founded in 2022, Adept made a splash by raising over $400 million from venture capital investors with the aim to train large language models to perform general tasks for enterprise clients. Once valued at over $1 billion, it released some open-source models but failed to launch successful commercial products. It's unclear whether Amazon has compensated Adept investors, or the details of the licensing fees. Amazon, Adept and the FTC declined to comment. The regulator is already investigating a similar move by Microsoft, which hired away much of another startup, Inflection AI's leadership and employees and agreed to pay a roughly $650 million licensing fee. The FTC is looking into whether the deal was a play to skirt merger disclosure requirements, a source told Reuters last month. Amazon offers free credits for startups to use AI models including Anthropic This is not Amazon's first AI startup bet. Amazon has invested $4 billion in AI startup Anthropic since September, taking a minority stake in the San Francisco company. The FTC earlier this year launched a study of investments and partnerships in the AI space, demanding information on Microsoft's relationship with OpenAI, and Anthropic's tie ups 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 also expressed concern about Big Tech companies wielding their existing advantages in AI to shut out smaller competitors. The FTC and Justice Department have staked out responsibility for potential probes into Microsoft, OpenAI and chipmaker Nvidia. Read Comments

FTC seeking details on Amazon deal with AI startup Adept

The FTC is investigating Amazon's hiring of Adept's David Luan amid AI competition with Google and Microsoft, following a January inquiry. Amazon invested $4B in Anthropic. Adept, backed by $400M, released open-source models but lacked commercial success. The FTC also examines potential merger disclosures, pricing, and personnel strategies.The U.S. Federal Trade Commission has asked Amazon.com to provide more details on its deal to hire top executives and researchers from artificial intelligence startup Adept, a person familiar with the matter told Reuters. The request reflects the FTC's growing concern about how AI deals have been put together and follows a broader review of partnerships between Big Tech and prominent AI startups. The informal inquiry into Amazon, which has not previously been reported, centers on last month's announcement that Adept Chief Executive David Luan and others were leaving to join Amazon, which would also license some of the startup's technology. Such inquiries do not necessarily result in an official investigation or enforcement action. Amazon is trying to catch up with rivals Google and Microsoft, which partners with OpenAI, in developing its own large language models that can respond almost instantaneously to complicated prompts or queries. Reuters previously reported on Amazon's efforts to establish a new organization called the Artificial General Intelligence (AGI) team, focused on developing large language models. Luan is now running the "AGI Autonomy" team, consisting of many former Adept employees, and reporting to Rohit Prasad, head of the AGI team. Founded in 2022, Adept made a splash by raising over $400 million from venture capital investors with the aim to train large language models to perform general tasks for enterprise clients. Once valued at over $1 billion, it released some open-source models but failed to launch successful commercial products. It's unclear whether Amazon has compensated Adept investors, or the details of the licensing fees. Amazon, Adept and the FTC declined to comment. The regulator is already investigating a similar move by Microsoft, which hired away much of another startup, Inflection AI's leadership and employees and agreed to pay a roughly $650 million licensing fee. The FTC is looking into whether the deal was a play to skirt merger disclosure requirements, a source told Reuters last month. This is not Amazon's first AI startup bet. Amazon has invested $4 billion in AI startup Anthropic since September, taking a minority stake in the San Francisco company. The FTC earlier this year launched a study of investments and partnerships in the AI space, demanding information on Microsoft's relationship with OpenAI, and Anthropic's tie ups 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 also expressed concern about Big Tech companies wielding their existing advantages in AI to shut out smaller competitors. The FTC and Justice Department have staked out responsibility for potential probes into Microsoft, OpenAI and chipmaker Nvidia.

Exclusive-FTC seeking details on Amazon deal with AI startup Adept, source says

The informal inquiry into Amazon, which has not previously been reported, centers on last month's announcement that Adept Chief Executive David Luan and others were leaving to join Amazon, which would also license some of the startup's technology. Such inquiries do not necessarily result in an official investigation or enforcement action. Amazon is trying to catch up with rivals Google and Microsoft, which partners with OpenAI, in developing its own large language models that can respond almost instantaneously to complicated prompts or queries. Reuters previously reported on Amazon's efforts to establish a new organization called the Artificial General Intelligence (AGI) team, focused on developing large language models. Luan is now running the "AGI Autonomy" team, consisting of many former Adept employees, and reporting to Rohit Prasad, head of the AGI team. Founded in 2022, Adept made a splash by raising over $400 million from venture capital investors with the aim to train large language models to perform general tasks for enterprise clients. Once valued at over $1 billion, it released some open-source models but failed to launch successful commercial products. It's unclear whether Amazon has compensated Adept investors, or the details of the licensing fees. The regulator is already investigating a similar move by Microsoft, which hired away much of another startup, Inflection AI's leadership and employees and agreed to pay a roughly $650 million licensing fee. The FTC is looking into whether the deal was a play to skirt merger disclosure requirements, a source told Reuters last month. This is not Amazon's first AI startup bet. Amazon has invested $4 billion in AI startup Anthropic since September, taking a minority stake in the San Francisco company. The FTC earlier this year launched a study of investments and partnerships in the AI space, demanding information on Microsoft's relationship with OpenAI, and Anthropic's tie ups 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 also expressed concern about Big Tech companies wielding their existing advantages in AI to shut out smaller competitors. The FTC and Justice Department have staked out responsibility for potential probes into Microsoft, OpenAI and chipmaker Nvidia. (Reporting by Krystal Hu and Greg Bensinger in San Francisco, Jody Godoy in New York; Editing by Kim Coghill)

FTC inquires into Amazon's AI hiring deal amid broader scrutiny of big tech partnerships

The US Federal Trade Commission (FTC) has pulled Amazon for more information over its recent deal to hire top executives and researchers from AI startup Adept. The US Federal Trade Commission (FTC) has pulled Amazon for more information over its recent deal to hire top executives and researchers from AI startup Adept. That signals an increasing unease by the FTC regarding how AI-related deals are structured and follows a wider review of collaborations between major tech firms and top AI startups. The probe, which hasn't been previously reported, centres on the following: Amazon announced last month that Adept's CEO, David Luan, and other top officials were joining Amazon, as well as that Amazon would license some of Adept's technology. Such informal inquiries do not always lead to official investigations or enforcement actions. The push here for Amazon is to try to match other competitors like Google or Microsoft in racing to develop advanced large language models for instant responses to complex prompts. This project will now be led under the new Artificial General Intelligence (AGI) team at Amazon by Luan, heading the "AGI Autonomy" team of many people formerly at Adept, reporting directly to Rohit Prasad, head of the AGI team. In 2022, Adept attracted attention early on with its $400 million capital raise from venture capital investors for training large models for general-use tasks aimed at enterprise customers. Valued at a plus of $1 billion and having open-sourced some of the models, Adept could not launch successful commercial products. What remains to be seen is whether Amazon has compensated the investors or, at a minimum, licensing fees. The FTC, Amazon, and Adept have all declined to comment. But as part of a broader pattern, the FTC is separately investigating a similar move by Microsoft, which recently poached key leadership and employees from another startup, Inflection AI, and agreed to a $650 million licensing fee. People familiar with the matter say the FTC has begun investigating whether such deals are being used to circumvent merger disclosure requirements. This isn't the first time that Amazon has tiptoed into the AI startup space. Since September, Amazon has sunk $4 billion into AI startup Anthropic in exchange for a minority stake in the San Francisco company. Back in January, the FTC opened an investigation into investments and partnerships in the AI space by requesting information on the relationships between large tech firms like Microsoft, Google, and Amazon and AI companies, including how such deals affect strategic decisions, pricing, product and service access, and personnel. In the US, antitrust regulators have pointed out such concerns that large technology companies might use this AI advantage against smaller rivals. The FTC and the Justice Department have divvied the oversight of potential investigations into companies like Microsoft, OpenAI, and Nvidia.

Amazon's AI Ambitions Under FTC Scrutiny Amid Adept Deal

The U.S. Federal Trade Commission (FTC) has asked Amazon for more details on its deal to hire top executives and researchers from AI startup Adept, reflecting the FTC's growing concern about AI deals. This inquiry centers on last month's announcement that Adept CEO David Luan and others were joining Amazon (AMZN), which would also license some of the startup's technology. Amazon is striving to catch up with Google (GOOGL) and Microsoft (MSFT) in developing large language models. Adept raised over $400 million from venture capital investors but failed to launch successful commercial products. The FTC declined to comment. The FTC is also investigating a similar move by Microsoft, which hired away much of another startup, Inflection AI's leadership, and agreed to pay a roughly $650 million licensing fee. Amazon has invested $4 billion in AI startup Anthropic since September. The FTC's extensive document request in January seeks details on how AI company partnerships with Big Tech influence strategy, pricing decisions, access to products and services, and personnel decisions. Market Overview: The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Amazon's deal with AI startup Adept faces FTC scrutiny

The front desk of the Amazon office is pictured in New York, May 1, 2019. The Federal Trade Commission has launched an informal inquiry into Amazon's recently announced deal with AI startup Adept, CNBC has confirmed. The FTC is seeking more information about the agreement announced last month, which involved Amazon hiring key executives and licensing technology from Adept, a source familiar with the matter told CNBC. The person spoke on the condition of anonymity because they weren't authorized to speak publicly on the matter. Representatives from the FTC and Adept didn't immediately respond to a request for comment on the probe, which was first reported by Reuters. An Amazon spokesperson declined to comment on the details of the probe. The move comes as regulators in the U.S. and abroad are increasingly scrutinizing tech companies' investments and partnerships with AI startups. The FTC in January announced it's investigating Amazon, Alphabet and Microsoft's recent AI deals, while the Department of Justice is examining Nvidia, the top maker of chips powering the AI boom. Britain's competition watchdog said Tuesday it launched a probe into Microsoft's hiring of top talent from startup Inflection AI. The agency issued a report in April where it warned partnerships like the one between Microsoft and Inflection AI, along with Amazon and AI startup Anthropic may allow them to "shape these markets in their own interests." Lawmakers including Sen. Ron Wyden, D-Oregon, have pointed to Amazon's deal with Adept as an example of tech companies licensing technology or making acquihires in order to avoid antitrust scrutiny. As part of the agreement announced last month, Amazon hired Adept co-founder and CEO David Luan and "a few other deeply talented team members" to its team working on artificial general intelligence unit. It also agreed to license Adept's technology, multimodal models and some datasets. In a blog post last month, Adept said developing its own AI models would've required more capital, and said the Amazon deal will allow it to focus on building AI agents. The Adept deal marks Amazon's latest high profile AI bet. Amazon has also pumped billions of dollars into OpenAI competitor Anthropic, and has developed generative AI products across its cloud computing, retail and consumer electronics businesses.

Amazon deal with AI startup Adept under FTC scrutiny (AMZN)

Amazon's (NASDAQ:AMZN) deal to hire key executives and researchers from generative artificial intelligence startup Adept is under informal inquiry by the U.S. Federal Trade Commission. An Amazon spokesperson declined to comment on the matter to Seeking Alpha. Last month, Adept wrote a blog post saying that its co-founders and "some of its team" were joining Amazon to be a part of its Artificial General Intelligence team "to continue to pursue the mission of building useful general intelligence." The company also said Amazon was "licensing Adept's agent technology, family of state-of-the-art multimodal models, and a few datasets." Adept, which had raised more than $400M from venture capital firms, decided that it was moving into a new direction before Amazon's involvement, a person familiar with the matter told Seeking Alpha. The person added that many Adept employees, including those in product and engineering, are staying with Adept. Adept Chief Executive David Luan now runs the AGI Autonomy team and reports to AGI head Rohit Prasad, Reuters reported. The report comes on the same day that the U.K.'s Competition and Markets Authority said it was looking into a similar agreement between Microsoft (MSFT) and Inflection AI. It was reported last month that the FTC was also investigating whether the deal between Microsoft and Inflection AI was structured in a way to avoid a government scrutiny. The FTC said in January that it would study these types of partnerships between big tech companies and AI startups. "Our study will shed light on whether investments and partnerships pursued by dominant companies risk distorting innovation and undermining fair competition," FTC Chair Lina Khan said at the time. More on Amazon Amazon: Creating Recession Resistant Profits The More One Understands What Amazon Truly Is About, The Better It Looks Amazon's Q2 Will Likely Surprise You Taboola shares rally on Apple advertising deal Wolfe names favorites for growth in eCommerce and communication categories

Report: Amazon/Adept Deal Subject of FTC Inquiry

The Federal Trade Commission (FTC) has asked Amazon for details about the arrangement to hire researchers and high-level executives from the artificial intelligence (AI) firm Adept, Reuters reported Tuesday (July 16), citing sources familiar with the matter. The request comes amid growing interest among regulators in AI partnerships involving tech giants such as Amazon, Google and Microsoft. As reported last month, Amazon has hired Adept co-founder/CEO David Luan and other execs to join its artificial general intelligence (AGI) team. AGI is a form of artificial intelligence (AI) that can think like human beings. According to an internal memo cited by Bloomberg News, Amazon hopes to use Adept's technology developing agents, or AI tools that can handle tasks autonomously, to help it create products for automating software workflows. "David and his team's expertise in training state-of-the-art multimodal foundational models and building real-world digital agents aligns with our vision to delight consumer and enterprise customers with practical AI solutions." Rohit Prasad, head of the Amazon AI autonomy team, wrote in the memo. PYMNTS has contacted the FTC for comment on the Amazon/Adept deal but has not yet gotten a response. A spokesperson for Amazon declined to comment. The FTC is also looking into Microsoft's hiring of the leadership team of Inflection AI. The Reuters report notes -- per a source -- that investigation is examining whether the deal was an attempt to avoid merger disclosure requirements. In a separate case, the Department of Justice reportedly is looking into whether AI chipmaker Nvidia has violated antitrust laws, while the FTC is also examining Microsoft's relationship with OpenAI. "If these companies get slapped with an antitrust ruling, it could be a real game-changer for both the tech and AI industries," Aron Solomon, a lawyer and chief strategy officer at the legal services firm Amplify, told PYMNTS last month. "We could see these giants getting split up or having their wings clipped, which would open the door for smaller players and newcomers to step up and shake things up." Solomon also noted that a ruling like that could force companies to reexamine their business practices and partnerships. And that could have a domino effect on everything from supply chains to pricing and the availability of tech services and products. "Companies might have to go back to the drawing board and figure out how to play nice with others," he said.

Amazon Faces FTC Inquiry Over AI Talent Acquisition From Adept - Amazon.com (NASDAQ:AMZN)

Amazon aims to enhance AI capabilities to compete with rivals. Amazon.com Inc. AMZN is under scrutiny by the U.S. Federal Trade Commission (FTC) for its recent hiring of top executives and researchers from AI startup Adept. The FTC's request for more details reflects concerns about how AI-related deals are structured and follows a broader review of partnerships between major tech companies and AI startups. The informal inquiry, which has not previously been reported, focuses on Amazon's announcement that Adept CEO David Luan and others will join Amazon, which will also license some of Adept's technology, according to Reuters reports. These inquiries do not necessarily lead to formal investigations or enforcement actions. Amazon is working to catch up with rivals Alphabet Inc GOOGL and Microsoft Corp MSFT in developing advanced language models capable of responding to complex prompts. David Luan now leads Amazon's "AGI Autonomy" team, composed of many former Adept employees, and reports to Rohit Prasad, head of the AGI team, according to Reuters. Also Read: Amazon Set To Top Last Year's Prime Day Results Due To Early Deals, Analysts Say Adept, founded in 2022, had raised over $400 million to train language models for enterprise clients but struggled to launch successful commercial products. The FTC is also examining a similar move by Microsoft, which hired several leaders from another AI startup, Inflection AI, and agreed to pay a $650 million licensing fee. The FTC's broader investigation includes looking into investments and partnerships in the AI space, such as Amazon's $4 billion investment in AI startup Anthropic. The regulator seeks to understand how these partnerships affect strategy, pricing, product access, and personnel decisions. U.S. antitrust enforcers are concerned that Big Tech could leverage their advantages in AI to suppress smaller competitors. The FTC and the Justice Department are prepared to investigate potential anti-competitive behavior involving major tech firms and AI companies, such as Microsoft, OpenAI, and Nvidia Corp NVDA, Reuters writes. Amazon stock has gained more than 47% in the last 12 months. Investors can gain exposure to the stock via Consumer Discretionary Select Sector SPDR Fund XLY and Vanguard Consumer Discretionary ETF VCR. Also Read: Amazon Expands AI Shopping Assistant Rufus to All US Customers As Prime Day Approaches Price Action: AMZN shares are trading higher by 0.81% at $194.29 at the last check on Tuesday. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo via Shutterstock Market News and Data brought to you by Benzinga APIs