ERIC POSNER

With long-gestating antitrust cases against Google, Apple, and Amazon coming to fruition, many observers think that 2024 could be a turning point for Big Tech. Yet even as authorities press ahead with this litigation, they risk being blindsided by the rise of artificial intelligence, which is likely to reinforce Big Tech’s dominance of the economy.
The recent firing and rehiring of OpenAI CEO Sam Altman was interpreted as a conflict between cautious board members who worried about the risks of AI and enthusiasts like Altman. But the real significance of this episode was what it revealed about OpenAI’s relationship with Microsoft, the largest investor in OpenAI’s commercial operations. While OpenAI’s nonprofit structure nominally means that only its board controls it, the board was forced to rehire Altman after Microsoft expressed misgivings that helped instigate an employee revolt.
Microsoft is not just an investor in OpenAI; it is also a competitor. Both companies develop and sell AI products, and Microsoft had stopped short of acquiring OpenAI to avoid antitrust problems. But if Microsoft controls or partly controls OpenAI, the two companies may have an illegal collusive relationship. That is why the US Federal Trade Commission and the United Kingdom’s competition authority are both investigating the matter.
The OpenAI-Microsoft relationship is only a small part of a rapidly growing AI oligopoly. As a recent paper by the law professors Tejas Narechania of the University of California, Berkeley, and Ganesh Sitaraman of Vanderbilt University documents, market power is rife all along the AI supply chain. The monopolist Nvidia manufactures most of the chips needed for AI development. Amazon, Google, and Microsoft dominate cloud computing, which is essential for storing the data on which AI models are trained.
Since these companies and Meta (Facebook/Instagram’s parent company) are among the only ones that can collect and store such data, they are also the ones developing – and profiting from – the most important AI models and applications. While Microsoft has a lock on ChatGPT, along with its own proprietary AI apps, Google has Bard and, alongside Amazon, is investing billions in Anthropic (the developer of Claude).









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