The DOJ is worried that the overlapping presence of board members across multiple Big Tech companies may create incentives to avoid competition.
Andrew Forman, deputy assistant attorney general for antitrust, stated at a Washington D.C. conference that the U.S. Department of Justice is closely monitoring AI competitors with shared board members. “That’s something we’re particularly focused on,” Forman said. As the private sector embarks on its AI arms race, maintaining competition is the utmost priority for federal regulators. However, start-ups and companies sharing board members present opportunities for collusion or conflicts of interest that can slow innovation and disenfranchise workers, shareholders and consumers.
AI investing is already extraordinarily top-heavy; Google (GOOGL), Microsoft (MSFT), and Amazon (AMZN) make up two-thirds of all venture capital invested in generative AI start-ups in 2023. As nearly every major tech company has entered an AI hiring frenzy to woo the world’s best thinkers while developing and innovating their own new AI product verticals, Big Tech companies could compete directly with the start-ups they invest in. Or, worse, the overlapping presence of board members across multiple companies may create incentives to avoid competition in certain product domains or in hiring specific AI engineers. Such behavior, resembling collusion, could potentially be interpreted as monopolistic conduct.
Microsoft has positioned itself as a frontrunner in the AI race through early investments in OpenAI. It currently holds a non-voting board membership and serves as a strategic partner to the creators of ChatGPT. Microsoft invested $16 million in the European AI start-up Mistral while inking a $650 million licensing deal with Inflection AI (for which Nvidia is also an investor) and poaching most of its employees, including co-founders Mustafa Suleyman and Karén Simonyan. The company also recently closed a deal to invest $1.5 billion in the UAE’s AI start-up G42. Inflection, Mistral, OpenAI and G42—all developing generative AI technology—are technically competing with each other and with Microsoft.
The Walt Disney Company (DIS)’s chief financial officer, Hugh Johnston, is among Microsoft’s board of directors. Disney’s extensive video game library competes directly with Microsoft’s recently acquired Activision Blizzard (ATVI), and both companies have invested in AI capabilities and start-ups for content creation. Microsoft also inked a five-year deal with Coca-Cola to “accelerate cloud and generative AI initiatives,” as per an April 23rd press release. Coca-Cola and Disney share Carolyn Everson as a board director.
Microsoft’s board also includes Wells Fargo CEO Charles Scharf. Wells Fargo recently partnered with Microsoft’s major technology competitor, Google, to create an AI banking assistant called Fargo. Finally, Microsoft’s vice chair and president, Brad Smith, also serves on Netflix’s board of directors. Netflix has been part of the AI hiring spree, likely competing directly with Microsoft and its various investments for talent, and made headlines for posting salaries of around $900,000 to hire AI product managers. Netflix also launched a gaming vertical on its streaming platform for subscribers.
The Facebook (Meta (META)) and Instagram parent company hosts Marc Andreessen, a co-founder of the esteemed venture capital investment fund Andreessen Horowitz (A16Z), where he remains a general partner. A16Z maintains a list of the numerous AI start-ups it has invested in on its website, which includes Character.AI, a generative AI chatbox service for which A16Z led a $150 million fundraising round. Andreessen also serves on the boards of “AI-powered software platform” company Applied Intuition and software-as-a-service company Samsara, which utilizes AI capabilities, according to Andreessen’s bio on the A16Z website. A16Z backed Elon Musk’s Twitter (now called ‘X’) buy-out, meaning they likely also own equity in Musk’s xAI, his generative AI start-up that produced Grok as a competitor to ChatGPT. Musk said that the equity owners of X will get 25 percent of xAI.
Meta’s board also includes Doordash (DASH) co-founder and CEO Tony Xu. Doordash is building its AI capabilities by incorporating voice recognition in the ordering process, a technology that Meta is also developing, and is actively poaching top AI talent from renowned start-ups. Xu’s Doordash includes Netflix’s CEO Greg Peters on its board of directors; Netflix is a direct content competitor.
Amazon recently completed its $4 billion investment in Anthropic, a generative AI company that will integrate with Amazon’s AWS, cloud and custom chips to build its AI models. Other investors in Anthropic include Google, which agreed to invest $2 billion in the company last October, and Salesforce. Amazon’s board includes Andrew Ng, a globally renowned AI expert who leads the venture capitalist AI Fund and has made numerous exclusive AI investments. AI Fund maintains a complete list of its portfolio companies on its website.
John Hennessy, chair of Alphabet’s board of directors, also serves on the board of Cisco Systems, which recently announced an AI partnership with Nvidia; Google is also a developer of semiconductors. Other names on Google’s board include R. Martin Chavez—who concurrently serves as the chairperson of Recursion Pharmaceuticals, which received a major investment from Nvidia—and Robin Washington, who also serves on the board of Salesforce, which has emerged as another major player in investing in AI start-ups, with its venture capital arm doubling its Generative AI Fund to $500 million in 2023. Salesforce and Nvidia are co-investors in the billion-dollar start-up Together AI.
