Amazon Faces FTC Inquiry Over AI Talent Acquisition From Adept

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.

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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.

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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.

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