Investments in artificial intelligence by Alphabet Inc.’s Google, Apple Inc., and Microsoft Corp. warrant deeper scrutiny from the UK’s antitrust watchdog over concerns they are being leveraged to further entrench their market power.
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The Competition and Markets Authority said Thursday it has uncovered an “interconnected web” of partnerships and investments within AI involving a handful of the same tech firms, that may allow them “to shape these markets in their own interests.” Meta Platforms Inc., Amazon.com Inc. and Nvidia Corp. were also named.
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The findings come after the agency began a review into AI foundation models — AI systems that can be adapted to a range of tasks — to root out any potential competition issues in the fast-growing market. The CMA said it wanted to learn from the past in digital markets where a winner-takes-all dynamic led to the rise of a small number of all-powerful platforms.
“When we started this work, we were curious. Now, with a deeper understanding and having watched developments very closely, we have real concerns,” Sarah Cardell, chief executive officer of the CMA, said.
The CMA’s remarks reflect concerns around how the biggest US tech companies have acquired stakes in many of the most promising AI startups, deals that involve both funding and strategic access to infrastructure.
Microsoft is OpenAI’s biggest backer, has invested in French AI startup Mistral and recently hired most of the team from Inflection AI. Google, owner of the AI lab DeepMind, has invested in OpenAI rival Anthropic, as has Amazon. Chipmaker Nvidia has backed dozens of startups, including large language model startup Cohere.
Such deals may attract less regulatory scrutiny than full acquisitions, though the EU is probing Microsoft over the nature of its relationship to OpenAI and Mistral. Margrethe Vestager, the bloc’s antitrust chief also said Thursday that AI is going to change the marketplace and regulators need to be vigilant.
“We see a lot of entrenched market power when it comes to technology,” Vestager said in an interview with Bloomberg Television. “It’s really important that now when we have technology, which is not just a new technology but is basically a new world that we’re looking into, that we make sure it’s a competitive new world.”
The US Federal Trade Commission also launched inquiries into Alphabet, Amazon and Microsoft’s AI partners. The CMA also has a separate initial investigation into Microsoft’s OpenAI investment.
Read More: Big Tech’s Year of Partnering Up With AI Startups
The CMA will be assessing the market over the coming months and may use existing merger and investigations reviews to intervene. It is also considering whether to include this behavior in its new powers under the Digital Markets, Competition and Consumers Bill that will come into force this summer.
Google, Apple, Microsoft, Amazon, Nvidia and Meta didn’t immediately respond to requests for comment.
–With assistance from Katharine Gemmell, Katie Greifeld and Annmarie Hordern.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
