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The top US antitrust official will address the factitious intelligence sector “with urgency” amid fears that power over this groundbreaking technology is concentrated within the hands of just a few well-funded players.
Jonathan Kanter said in an interview with the Financial Times that he’s studying “monopoly bottlenecks and the competitive landscape” in artificial intelligence, covering all the pieces from the computing power and data used to coach large language models to cloud service providers, engineering talent and access to key hardware akin to graphics processing chips.
Regulators are concerned that the emerging AI sector has “reached the height of competition, not the underside,” and wish to act “urgently” to be certain that the technology firms that already dominate don’t control the market, Kanter said.
“Sometimes an intervention is most useful when it's done in real time,” he added. “The fantastic thing about it’s that you would be able to be less invasive.”
Kanter, now in his third 12 months on the Justice Department, has worked with the Federal Trade Commission to push for tougher antitrust policies and sued tech firms akin to Google and Apple, accusing the US government of unfair monopolies in services akin to app stores, engines like google and digital promoting. He has worked closely with FTC Chair Lina Khan.
He said regulators would regulate the generative AI sector and examine the competitive landscape within the microchip space.
Kanter said the GPUs needed to coach LLMs have change into a “scarce resource.” Nvidia dominates sales of probably the most advanced GPUs and its market capitalization surpassed that of Apple on Wednesday, making it the second-most precious publicly traded company on the planet.
The U.S. Department of Justice and the U.S. Federal Trade Commission have reached an agreement that may split antitrust oversight of major AI players, two people aware of the matter say. The Justice Department will lead the investigation into Nvidia, while the FTC will oversee the assessment of Microsoft and OpenAI's conduct.
The FTC, the Justice Department and a spokesman for Nvidia declined to comment on the agreement, which was first reported by The New York Times. Microsoft didn’t immediately reply to a request for comment.
Kanter pointed to government initiatives to encourage domestic production, including the $39 billion in incentives within the Chips Act, but added that antitrust regulators are currently reviewing how chipmakers are marketing their most advanced products within the face of rapidly increasing demand.
“One of the things you could have to think through is the conflict of interest, a lever of leverage because they're afraid of supporting a competitor or supporting a customer,” Kanter said. “If decisions are made that show that firms aren’t concerned with maximizing profitability or creating shareholder value, but are more concerned with the competitive consequences,” then that might be an issue.
Since the high-profile release of OpenAI's ChatGPT chatbot in November 2022, an arms race has broken out as firms rush to sign multi-billion dollar partnerships with a few of the most promising AI firms and people developing models and apps based on the technology.
A typical example of such deals is Microsoft's $13 billion investment in OpenAI, which included rights to the start-up's mental property and a share of profits, but was not yet an entire acquisition.
Nevertheless, the FTC and British and European competition authorities have announced that they are going to investigate the connection alongside Google and Amazon's multi-billion dollar deals with competitor Anthropic.
In March, Microsoft CEO Satya Nadella hired Mustafa Suleyman, the founding father of one other AI startup called Inflection, and most of his 70 employees to construct a brand new consumer AI division. Some industry observers saw the deal as a tactic to avoid antitrust laws and avoid a proper investigation.
Microsoft and Inflection stressed on the time that the agreement was not an acquisition and that Inflection would remain an independent company.
The FTC is currently investigating whether Microsoft improperly reported its take care of the startup, in accordance with an individual aware of the matter. The FTC declined to comment on the investigation, which was first reported by the Wall Street Journal. A Microsoft spokesman said it takes its “legal obligations to report transactions … seriously and is confident that we’ve met those obligations.”
“Acqui-hires are something that antitrust regulators will have a look at,” Kanter said, but declined to comment on specific transactions. “We don't use any stylistic or formalistic features like these firms (explain these deals). What we have a look at are the market realities.”
“We concentrate on the facts. If the shape is different however the content is similar, then we don't hesitate to act. We have a look at what raw materials we want to make a product. Whether that's steel or engineers, that matches into the normal paradigm of what's essential to us.”
Microsoft has denied allegations that it exerts unfair influence or de facto control through its investments and cloud computing services. The company has also invested in French company Mistral and invested $1.5 billion in Abu Dhabi-based AI group G42.
“The partnerships we pursue have proven to extend competition out there,” the technology group's president, Brad Smith, told the FT. “I could argue that Microsoft's partnership with OpenAI created this latest AI market” and without its help the start-up “wouldn’t have been in a position to train or deploy its models.”
When asked why Microsoft didn't buy Inflection, he said, “We didn't need to own the corporate. We desired to hire a few of the individuals who worked there.”
