Google's strategic move against Microsoft catches Silicon Valley's attention

Alphabet's shares received a boost on Wednesday despite a massive report that echoed through Silicon Valley. The morning headlines announced that Google allegedly attempted to involve a government agency against one of its major tech rivals. Increased scrutiny by antitrust authorities often focuses on the group of major tech companies known as the "Magnificent 7." However, one of their frontrunners now seems eager to redirect the regulatory focus onto another player. Google has already been in the crosshairs of antitrust accusations multiple times. In 2020, a lawsuit by eleven attorneys general, along with the U.S. Department of Justice, accused the company of illegally monopolizing the search engine market. Similar allegations were made in the field of advertising technology in 2023. Now, the signs seem to be changing. Google has apparently seized the opportunity to leverage the regulatory environment in the burgeoning AI market to its advantage. A new report from The Information reveals that Google has urged the U.S. Federal Trade Commission (FTC) to terminate an exclusive agreement between Microsoft and OpenAI. Microsoft holds significant stakes in the AI research company, and the agreement stipulates that users who wish to use OpenAI's large language models must do so exclusively via Microsoft's servers. Given the popularity of models like ChatGPT and DALL·E, this agreement is crucial for Microsoft. According to reports, Google's request is based on an investigation that the FTC initiated last month regarding Microsoft's cloud computing business. This investigation asks leading tech companies if they perceive the agreement between Microsoft and OpenAI as market-distorting. From Google's perspective, the answer seems to be a clear yes, as the agreement denies them access to a lucrative market.