The US Federal Trade Commission (FTC) is reportedly intensifying its antitrust investigation into Microsoft, a move that could significantly reshape competition in the artificial intelligence (AI) and productivity software sectors.
As part of this probe, the FTC has issued a civil investigative demand, requiring Microsoft to provide extensive data regarding its AI operations. This includes the cost of acquiring data and training models, dating back to 2016, according to a report by Bloomberg News. Regulators are also seeking information on Microsoft’s data centers, challenges in securing sufficient computing power to meet customer demand, and the company’s software licensing practices.
Initiated last year under former FTC Chair Lina Khan, the investigation is also scrutinizing Microsoft’s decision to reduce funding for its internal AI projects after forming a partnership with OpenAI. This strategic shift could be viewed as a means of limiting competition within the rapidly expanding AI sector. Khan authorized the inquiry before leaving office, with Andrew Ferguson assuming the chairmanship.
Implications for the Industry
The FTC’s investigation could offer new insights into Microsoft’s reliance on OpenAI’s models and its level of influence over the AI startup.
“It’s the ‘search’ wars all over again,” said Neil Shah, co-founder of Counterpoint Research. “This could have multiple implications, ranging from the integration of third-party models and the flexibility to power Copilot, which may raise optimization and security concerns for enterprises, to the pricing of Copilot and its integrated services.”
Beyond the intricacies of AI integration, the investigation has the potential to alter the competitive dynamics in cloud computing and enterprise software. Changes to Microsoft’s licensing terms or business practices could significantly influence pricing strategies and introduce new regulatory obstacles for both cloud and AI providers.
“The FTC’s antitrust investigation into Microsoft’s cloud services and AI partnerships could definitely lead to regulatory interventions affecting licensing terms, pricing models, and competition in the enterprise AI and cloud services market,” stated Mukesh Ranjan, vice president at Everest Group. “Enterprises relying on Microsoft may face disruptions or increased costs as licensing agreements are revised.”
Increased regulatory scrutiny of Microsoft’s partnership with OpenAI could also foster greater competition within the AI sector, potentially benefiting rival service providers.
“We are already seeing significant innovation in this space post the release of DeepSeek,” Ranjan added. “For example, Google recently unveiled Gemma 3, an advanced AI model designed to operate efficiently on a single GPU, which it claims to be much better than OpenAI offerings.”
Effects in the Enterprise
Analysts are advising a wait-and-see approach to assessing the potential effects of the antitrust probe.
“The biggest potential impact would be reducing OpenAI’s role as the default AI provider for Microsoft products,” explained Hyoun Park, CEO and chief analyst at Amalgam Insights. “Microsoft has already begun diversifying, and its partnership with OpenAI is not as tight as it was a year ago. Recent shifts toward agentic AI and open-source models have made ChatGPT less competitive as an enterprise tool, pushing Microsoft to develop independent AI solutions.”
If the investigation leads to sanctions, businesses will need to closely monitor which AI model providers gain broader access to Microsoft’s ecosystem or whether the company will be compelled to develop its own models.
“But cynically, this move appears to be an attempt to slow down OpenAI in the short term, as the AI market remains highly dynamic, with no company guaranteed to maintain its leadership over the next three to five years,” Park added.
Notably, the timing of this probe is particularly significant as it unfolds while OpenAI is preparing to play a pivotal role in the Stargate initiative, with Elon Musk’s Grok emerging as a potential competitor.
Microsoft has not yet responded to requests for comment.
