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.
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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.
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