In recent years,AI has had a significant impact on various sectors, from the tech industry to healthcare, and has attracted the attention of antitrust authorities in Europe. Margrethe Vestager, the European Union’s antitrust chief, has stressed the importance of carefully assessing the impact of AI partnerships between large technology companies. In a speech recently, she said the EU will intensify its surveillance and scrutiny of Big Tech operations to prevent AI monopolization.
The impact of AI and the challenges for competition
According to Vestager,AI has led to unforeseen economic effects. For example, large-scale language models(LLMs) require huge amounts of data, cloud storage space and computing capacity. This creates barriers to entry for European startups trying to compete with large U.S. tech companies. Vestager stressed that disruption in the AI sector will not be driven by a few young college geniuses, but rather from within existing technology ecosystems.
Big Tech partnerships and the dominance of generative AI.
Therise of generativeAI in recent years has highlighted how developments are dominated by a small number of companies with close ties to Big Tech platforms or that are tech giants themselves. For example, OpenAI, creator of ChatGPT, has a close partnership with Microsoft, while Google and Amazon invest in OpenAI’s rival, Anthropic. Meta, the parent company of Facebook, is leveraging its social media data to develop its own fundamental models of AI (LLaMA).
European startups’ challenges in accessing AI infrastructure.
During a seminar, a concern emerged about how European startups can compete without equivalent access to key AI infrastructure. Tobias Haar, general counsel of German AI fundamental model startup Aleph Alpha, pointed out that uncertainty about access to key AI inputs drove their decision to invest in building and training their own fundamental models in their data center. However, Haar pointed out that this infrastructure still lags far behind that of Big Tech. For example, Aleph Alpha’s data center uses 512 Nvidia A100 GPUs, while Microsoft announced the installation of about 10,000 GPUs in the UK last year alone.
EU action to balance the playing field
Despite the challenges, Vestager did not provide concrete plans on how the EU can level the playing field for local generative AI startups. However, she suggested that the EU will consider using existing tools, such as the Digital Markets Act (DMA), to regulate Big Tech AI partnerships. He also stressed the importance of international cooperation between antitrust authorities and regulators to address AI challenges. The EU is trying to strike a balance between regulating AI risks and creating a vibrant ecosystem for innovation.
Proposed solutions to address the dominance of Big Tech’s AI partnerships.
During the seminar, Barry Lynn of the Open Markets Institute proposed several solutions to curb the power of Big Tech in the AI sector. He suggested separating cloud infrastructure into utilities to reduce their leverage. It also called for the creation of a non-discrimination regime for platforms to prevent information manipulation and advocated the appropriation of aggregate data collected by tech giants to ensure that it is publicly owned rather than owned by the companies themselves.
Carel Maske, Microsoft’s director of competition, responded to Lynn’s proposals by emphasizing the need to consider the investments needed for innovation in cloud and infrastructure. He suggested that structural separation of Big Tech from key AI infrastructure could hinder the investments needed to push innovation forward.
The need for international collaboration
Andreas Mundt, chairman of the German Competition Authority, shared his office’s experience in trying to evaluate the partnership between Microsoft and OpenAI. He pointed out that current merger control procedures have failed to counter Microsoft’s competitive influence on OpenAI. Mundt emphasized the importance of cooperation among antitrust authorities around the world to address the challenges posed by Big Tech’s AI partnerships.
Vestager praised the European Commission’s decision to initiate a procedure to examine whether the partnership between Microsoft and OpenAI falls under EU merger rules. She also emphasized the importance of carefully evaluating all AI partnerships to identify any impacts on competition.