Divisional Head Digitalisation, Centre for European Policy, Berlin | Affiliated Researcher, MPI for Legal History & Theory, Frankfurt a.M. | Post-Doctoral Researcher, Humboldt University, Berlin
In the rapidly evolving field of generative Artificial Intelligence (genAI), are we adequately addressing competitive dynamics to ensure safety & innovation? In my new Centrum für Europäische Politik study, co-authored with my colleague Dr. Matthias Kullas, we look at the entire value chain of genAI services and highlight the urgent need for vigilant competition policy and the strategic promotion of an environment conducive to innovation and diversity in this sector. Our investigation begins with the characteristics of the genAI infrastructure, highlighting the critical role of large datasets and massive computing power in the development and deployment of basic models. We identify significant barriers to entry, in particular the “winner-takes-most” market dynamics prevalent in the foundation model arena, where significant economies of scale and scope, as well as scaling laws (“emerging capabilities” of genAI), favour incumbents, stifling the vibrant competition essential for innovation and market diversity. In addition, we explore the downstream implications of genAI deployment, highlighting the challenges faced by new entrants in competing with BigTech firms with privileged access to cutting-edge models, scarce human capital, and cloud service space. The emergence of “app store” models for genAI, similar to those pioneered by OpenAI, could further concentrate market power. Our analysis goes beyond mere market mechanics, arguing for a holistic approach to EU competition policy that integrates resilience considerations and takes into account the broader societal, ethical, and security implications of genAI. These include potential risks to democratic discourse, the proliferation of deepfakes, and the recent use of genAI in malicious services, highlighting the need for a regulatory framework that balances competition with the protection of societal values. For a deeper dive into our findings and policy recommendations, which we submitted yesterday to the European Commission as part of its public consultation on “Competition in Generative AI”, access the full paper here: https://lnkd.in/eCfXz8-9 #GenAI #CompetitionLaw #DigitalResilience #EU
