Microsoft is on top of the world right now, riding its AI dominance to become the worlds second-most valuable company,worth somewhere in the vicinity of $3 trillion, depending on the days stock price.But that could easily change and not because competitors have found a way to topple it as king of AI.A federal antitrust investigation threatens to do to the company what was done to it 35 years ago by a US Justice Department suit that tumbled the company from its perch as the worlds top tech company. It also led to a lost decade in which Microsoft lagged in the technologies that would transform the world the internet and the rise of mobile.The current investigation waslaunched last year by the Federal Trade Commission (FTC) under the leadership of Chair Lina Khan. Khan was ousted by President Donald J. Trump when he re-took office in January, and theres been a great deal of speculation about whether his administration would kill the investigation or let it proceed.That speculation ended this month, when new FTC Chair Andrew Fergusonasked the company for a boatload of information about its AI operationsdating back to 2016, including detailed requests about its training models and how it acquires the data for them.The investigation isnt just about AI. It also covers Microsofts cloud operations, cybersecurity efforts, productivity software, Teams, licensing practices, and more. In other words, just about every important part of the company.More details about the investigationAlthough the investigation is a broad one, the most consequential parts focus on the cloud, AI, and the companys productivity suite, Microsoft 365. It will probably dig deep into the way Microsoft uses its licensing practices to push or force businesses to use multiple Microsoft products.Heres how The New York Times describes it: Of particular interest to the FTC is the way Microsoft bundles its cloud computing offerings with office and security products.The newspaper claims the investigation is looking at how Microsoft locks customers into using its cloud services by changing the terms under which customers could use products like Office. If the customers wanted to use another cloud provider instead of Microsoft, they had to buy additional software licenses and effectively pay a penalty.Thats long been a complaint about the way the company does business. European Union regulators last summer charged thatMicrosoft broke antitrust laws by the way it bundles Teams into its Microsoft 365 productivity suite. Teams rivals like Zoom and Slack dont have the ability to be bundled like that, the EU says, giving Microsoft an unfair advantage. Microsoft began offering some versions of the suite without Teams,but an EU statement about the suitsays the EU preliminarily finds that these changes are insufficient to address its concerns and that more changes to Microsofts conduct are necessary to restore competition.AI is a target, tooMicrosofts AI business is also in the legal crosshairs, though very few details have come out about it. However, at least part of the probe will likely center on whether Microsofts close relationship with OpenAI violates antitrust laws by giving the company an unfair market dominance.The investigation could also focus on whether Microsoft uses its licensing practices for Microsoft 365 and Copilot, its generative AI chatbot, in ways that violate antitrust laws.In a recent column, I wrote that Microsoft now forces customers of the consumer version of Microsoft 365 to pay an additional fee for Copilot even if they dont want it. In January, Microsoft bundled Copilot into the consumer version of Microsoft 365 and raised prices on the suite by $3 per month or $30 for the year. Consumers are given no choice if they want Microsoft 365, theyll have to pay for Copilot, whether they use it or not.Microsoft also killed two useful features in all versions of Microsoft 365, for consumers as well as businesses, and did it in a way to force businesses to subscribe to Copilot. The features allowed users to do highly targeted searches from within the suite. Microsoft said people could instead use Copilot to do that kind of searching.(In fact, Copilot cant match the features Microsoft killed.) But business and educational Microsoft 365 users dont get Copilot bundled in, so theyll have to pay an additional $30 per user per month if they want the search features, approximately doubling the cost of the Office suite.Expect the feds to file suitIts almost certain the feds will file at least one suit against Microsoft by the FTC, the Justice Department, or maybe both. After all, federal lawsuits against Amazon, Apple, Google, and Meta launched by the Biden administration have been continued under Trump. Theres no reason to expect he wont target Microsoft as well.Theres another reason the feds could hit Microsoft hard. Elon Musk is suing OpenAI and Microsoft, claiming their relationship violates antitrust laws. Hes also spending billions to compete against them. Given that hes essentially Trumps co-president as well as being Trumps most important tech advisor its pretty much a slam dunk that one more federal suit will be filed.As one piece of evidence that suits are coming, theFTC weighed in on Musks side in his suit against the company and OpenAI, saying antitrust laws support his claims. In a wink-wink, nudge-nudge claim that no one believes, the agency says its not taking sides in the Musk lawsuit.The upshotExpect the investigations into Microsoft to culminate in one or more suits filed against the company. After that, its anyones guess what might happen. The government could ask that Microsoft be broken into pieces perhaps lopping off its AI arm. It could even ask that the cloud as well as AI be turned into their own businesses. Or it could go a softer route by fining the company billions of dollars and forcing it to change its business practices.Either way, hard times are likely ahead for Microsoft. The big question will be whether CEO Satya Nadella can weather the turbulence better than Bill Gates and Steve Ballmer did when the previous federal suit against the company laid it low for a decade.