Competition under threat as cloud giants selectively invest in startups, watchdog says

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By Craig Hale
published

CMA focuses on cloud companies for a different reason

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Image Credit: Shutterstock (Image credit: Shutterstock)

In a recent address at the 72nd Antitrust Law Spring Meeting in Washington DC, UK Competition and Markets Authority (CMA) CEO Sarah Cardell delved into the potential impact of the current AI landscape on competition and consumer protection.

Emphasizing AI's transformative benefits, Cardell implied that tech giants like Amazon, Google, and Microsoft have been selectively investing in specific startups.

Her speech, recorded via speaker’s notes, highlighted the need for proactive measures to ensure fair, open, and effective competition in the AI landscape.

Cloud companies face CMA scrutiny yet again

Reflecting on the CMA’s ongoing scrutiny of the cloud and AI industry, Cardell outlined a series of risks that current practices pose.

Concerns were raised about tech giants controlling critical inputs (such as compute and data) for foundation model development, potentially restricting access for other companies. Such restriction could lead to incumbent firms protecting their existing positions from disruption, which Cardell fears might even lead to market power in other markets beyond AI.

The CMA’s CEO also noted that partnerships involving key players in the AI landscape, such as the big three, could reinforce their existing positions of market power and dominance, making it even harder for smaller companies to reach the top.

To address these concerns, the CMA has already committed to enhancing its merger review process to assess the implications of partnerships and arrangements and to monitor current and emerging partnerships more closely, including that of Microsoft and OpenAI.

Finally, the CMA has plans to examine AI accelerator chips and their impact on the foundation model value chain. 

As the AI landscape continues to evolve, it’s clear that the CMA remains committed to its existing investigations into dominant companies and encouraging competition. 

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Craig Hale
Craig Hale

With several years’ experience freelancing in tech and automotive circles, Craig’s specific interests lie in technology that is designed to better our lives, including AI and ML, productivity aids, and smart fitness. He is also passionate about cars and the decarbonisation of personal transportation. As an avid bargain-hunter, you can be sure that any deal Craig finds is top value!