The biggest news in technology in 2023 was undoubtedly the advances in artificial intelligence and its possible effects on society. AI already has proven benefits in some fields, such as medical imaging, and the recent advances have sparked public debate on the promises and pitfalls of AI as it advances.
However, regulators may soon stop it in its tracks before it has a chance to take off.
In late January, the Federal Trade Commission announced it was investigating the recent high-profile acquisitions of AI startups by major tech companies. While an investigation is not the same as legal action, the FTC’s recent history suggests it may be gearing up to make formal complaints. Should the commission do so, it will choose to ignore how an acquisition may provide AI with the resources it needs to operate. It will also ignore how overzealous antitrust action could slow technological innovation.
The FTC’s investigation focuses on a few major tech companies, including Alphabet, Amazon and Microsoft, and AI companies OpenAI and Anthropic.
Commenting on the announcement, FTC Chair Lina Khan said the study would help determine whether major tech companies are trying to corner the AI market in a way that would preclude serious competition. Given the agency’s history of going after large tech companies, this is likely the first step toward further scrutinizing these companies’ AI partnerships.
Major tech companies have indeed been acquiring AI startups. In response, some critics have accused the companies of trying to limit competition. This argument conveniently ignores the many ways in which Big Tech companies and startups benefit each other. Tech companies gain the expertise they need to develop AI, and startups can access critical resources.
A good example is the relationship between Microsoft and OpenAI, where, as part of their agreement, OpenAI is provided access to Microsoft’s computing infrastructure.
This agreement has proven crucial to OpenAI’s development of later ChatGPT models, which rely on enormous computing power to train chatbots. In addition, this agreement has given OpenAI access to Microsoft’s data centers. These data centers are crucial to train the advanced AI that OpenAI develops, but are also very resource intensive and usually out of reach for an independent startup.
Without the support of tech giants, supercomputers and an enormous amount of energy, AI technology would be unattainable for most startups. This alliance between startups and tech companies has fueled the AI revolution.
As the FTC investigates these partnerships, it should be careful not to damage the industry in a way that would harm innovation. One day, someone will discover a less resource-intensive way to create AI. Until that day arrives, protecting access to these resources should be a priority.
As the FTC investigates AI startup acquisitions, it should carefully differentiate between anticompetitive behavior and partnerships that accelerate AI’s development. Mistaking the former for the latter risks derailing the AI industry as it comes into its own. Regulators should not be so overzealous that they shut down beneficial innovations.
