Big Tech’s Call For Light Touch on AI Falls Flat With Enforcers

(Bloomberg) -- Artificial intelligence could help cure cancer, ease energy insecurity and reduce poverty – if regulators would just get out of the way. 

That was the message from executives with venture capital firm Andreessen Horowitz, OpenAI and Alphabet Inc.’s Google at an event in Washington on the sidelines of the world’s largest antitrust conference.

Regulators need to “be careful not to fight the last war,” Google’s top lawyer Kent Walker said. “The stakes here are too important to fall victim to partisan politics.”

Across the street at the main event, however, antitrust enforcers were less convinced of the need to step back. Federal Trade Commission Chair Lina Khan said technology companies have sought to “dazzle” policymakers with the possibilities of AI, but regulators aren’t taking a hands-off approach. 

“There’s no exemption from the laws prohibiting collusion, laws prohibiting price fixing, laws prohibiting monopolization, the laws prohibiting fraud,” Khan said Friday. “The FTC is going to take action.”

Antitrust enforcers across the world have become concerned that many of the most promising AI startups depend heavily on the dominant tech companies for their financing and infrastructure needs. Regulators worry that companies like Microsoft Corp., Google, and Amazon.com Inc. are tying themselves to promising startups to ensure they remain on top — much like the tech giants are alleged to have done to remain on top in the online and mobile space. 

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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 Corp. has backed dozens of startups including Cohere, an AI platform for businesses.

Most of the regulatory questions raised by industry representatives at events this week focused on antitrust issues, though they also mentioned copyright, dealing with misinformation and concerns about the amount of energy needed to power AI systems.

At dozens of breakfasts, lunches and other panels, representatives from the Big Tech companies argued that the development of artificial intelligence is a breakthrough capable of reshaping the economy. Google’s Walker likened the creation of AI tools to the mRNA vaccine technology used to combat Covid-19.

The burgeoning AI industry has different dynamics, said Haidee Schwartz, OpenAI’s associate general counsel for antitrust, calling it a “positive disruptor” that can bring greater competition and growth to new industries.

“Many, many companies are developing and deploying AI models and it’s a highly competitive marketplace,” said Schwartz, who previously worked at the FTC. Every day, companies are introducing “new models, new features, new programs, and you’re also seeing the costs of use of the models going down.”

Walker and Schwartz spoke at a luncheon hosted by the Abundance Institute, a new nonprofit associated with the Charles Koch-backed Center for Growth and Opportunity. The invitation-only event drew antitrust enforcers and in-house corporate lawyers attending a global competition conference in Washington this week hosted by the American Bar Association’s Antitrust Section.

At the main event, the enforcers themselves were more than a little wary of arguments that tech giants were making for lighter-touch regulation on AI. Sarah Cardell, who heads the UK’s antitrust watchdog, raised concerns that the largest US tech firms have created an “interconnected web” of partnerships and investments within AI.

In a report released to coincide with her remarks, the Competition and Markets Authority called out Microsoft, Google, Apple Inc., Meta Platforms Inc., Amazon and Nvidia , saying their investments in AI may allow them “to shape these markets in their own interests.” 

“Having watched developments very closely, we have real concerns,” Cardell said. “We believe it is important to act now to ensure that a small number of firms with unprecedented market power don’t end up in a position to control not just how the most powerful models are designed and built, but also how they are embedded and used across all parts of our economy and our lives.”