While policy-makers fret about its risks, competition authorities ought to be excited about artificial intelligence (AI). AI has the potential to boost competition by helping firms in many sectors create new content, innovate, research, advertise and optimise their operations. AI could therefore enable many new entrepreneurs to launch businesses, help existing firms expand into new areas, and shift labour and capital away from incumbents and towards more innovative firms. This could finally help address one of the key reasons for slow economic growth in developed countries: the struggle to raise productivity.
But to maximise the benefits of AI, developers of foundation models (FMs) – AI models which can be used for many different tasks – will need competitive pressure to make their models as widely available and as accessible as possible. And new AI firms will need the freedom and incentives to pursue disruptive innovation, not just innovation which boosts incumbents’ business models. Competition authorities in the UK, US, EU and the Union’s member-states are therefore all turning their attention to FMs. They are determined not to “repeat the mistakes of the past” – meaning they do not want AI to be intractably dominated by one or two firms. AI has already catapulted chip-maker NVIDIA into a new ‘big tech’ firm, and there is potential for many more of today’s AI start-ups to become powerful players. However, large tech firms might nevertheless continue to play an important role in the sector. Authorities should ensure these large tech firms compete aggressively to win customers - rather than fixating on their size.
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