In just two years, the global market for generative AI has doubled. It is estimated at 42 billion euros in 2023. By 2030, this figure could exceed 200 billion, indicates the Competition Authority.
While “this new sector is rapidly structuring”, the French regulator is taking up the subject with the aim of analyzing its competitive functioning. Because as it stands, the main beneficiaries are not new entrants.
Clouders consolidate their market power
At the heart of IAGen, we find “digital companies already strongly present in adjacent markets”, and in particular that of cloud services. Hyperscalers are on the move, consolidating “their current market power at the upstream end of the generative AI value chain.”
Their strategies further allow them to “leverage” their dominance in the cloud “to expand in this booming sector” of generative AI. A previous report from the Authority on the cloud had already highlighted certain practices of the giants of the sector.
“In general, competition authorities at the global level are attentive to the development of generative AI and its competitive functioning,” recalls the French regulator.
A risk of strengthening the concentration of powers “of a handful of actors” cannot be excluded. Given how IAGen’s models work, cloud providers have strategic infrastructure.
Guarantee fair and equitable access to data
Large computing powers are indeed essential for learning and inference. Data constitutes another essential resource. “Some major players in the sector could be tempted to limit access to data”, to reserve it for their own use or “to enter into exclusivity agreements with emerging companies.”
The Authority will also be interested in the question of skills. Thus, qualified labor could “potentially be captured by large digital players to the extent that they are likely to offer high salaries.”
The actions of some of the hyperscalers are already arousing the vigilance of the regulator, starting with their “active acquisition policy”. Microsoft, thanks to billions of dollars, reserves access to OpenAI on Azure.
Acquisitions to monitor and supervise
Amazon and Google have invested in a competitor, Anthropic. “Certain minority stakes in the sector are currently the subject of increased attention from several competition authorities.”
These operations must be watched closely. They will therefore be addressed as part of the opinion that the Authority will issue “in the coming months”. The regulator could thus formulate “recommendations aimed at better remedying their potential harmful effects.”
In order to inform its reflection, the Authority is launching a public consultation. Its purpose is “to collect comments from stakeholders.” Actors have until March 22 to send information to the competition watchdog.