The Competition and Markets Authority (CMA) revealed on Thursday its discovery of what it termed an “interconnected web” of partnerships and investments within the artificial intelligence (AI) landscape, implicating several major tech players including Meta Platforms Inc., Amazon.com Inc., and Nvidia Corp.
The revelation emerged from the CMA’s scrutiny of AI foundation models — versatile AI systems adaptable to various tasks — in a bid to preempt any potential competition concerns in the rapidly expanding AI market.
The agency expressed a determination to draw lessons from past instances in digital markets, where a winner-takes-all dynamic paved the way for the emergence of dominant platforms.
Tech Giants’ Strategic Maneuvering in AI Investments
Sarah Cardell, CEO of the CMA, voiced apprehensions regarding the strategic maneuvering of leading US tech companies, noting their significant stakes in promising AI startups. These investments, encompassing both financial backing and strategic access to infrastructure, have raised eyebrows among regulators.
Microsoft, for instance, stands as the primary investor in OpenAI and has made strategic investments in French AI startup Mistral, alongside recruiting a substantial portion of the team from Inflection AI.
Similarly, Google, the parent company of DeepMind, has invested in Anthropic, a competitor to OpenAI, alongside Amazon. Nvidia, a prominent chipmaker, has bolstered numerous startups, including Cohere, a platform specializing in large language models.
While these investments may attract less regulatory scrutiny compared to outright acquisitions, regulatory bodies on both sides of the Atlantic are intensifying their scrutiny. The European Union, through Margrethe Vestager, its antitrust chief, emphasized the need for vigilance in light of AI’s transformative potential, particularly in reshaping market dynamics.
In the US, the Federal Trade Commission has initiated inquiries into Alphabet, Amazon, and Microsoft’s AI partners, mirroring the CMA’s separate investigation into Microsoft’s investment in OpenAI.
Looking ahead, the CMA plans to assess the AI market comprehensively in the coming months and may leverage existing merger reviews and investigations to intervene where necessary. Moreover, it is contemplating the incorporation of such behavior into its new powers under the Digital Markets, Competition, and Consumers Bill, slated to take effect this summer.
Industry Response and Engagement with Regulatory Authorities
In response to the CMA’s findings, a Microsoft spokesperson expressed a willingness to engage with the authority, highlighting the importance of clarity and transparency in regulatory matters.
While Nvidia declined to comment, requests for comment from Google, Apple, Amazon, and Meta remained unanswered at the time of publication.