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Data access and labor market control spark concerns

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AI partnerships under scrutiny

By Jody Godoy

NEW YORK, June 7 (Reuters) - U.S. antitrust enforcers

are digging into Big Tech's role in the artificial intelligence

(AI) boom, exploring whether business practices by entrenched

players stifle competition in the burgeoning space.

The U.S. Department of Justice and Federal Trade Commission

(FTC) have moved to divvy up the biggest players in the

industry, a step that puts Nvidia ( NVDA ), OpenAI and Microsoft ( MSFT )

closer to potential investigations.

Here are some of the AI issues regulators are concerned about:

DATA

Assistant Attorney General Jonathan Kanter expressed a

"sense of urgency" to address the advantages big companies have

in their access to data used to train AI models, speaking at a

University of Chicago event in April.

"To the extent data has been aggregated or resides in the hands

of a small few, that may become the high water mark for

competition because the barriers to entry in scale and access to

these key ingredients is limited to a small number of players,"

he said.

WORKERS

Another area of concern is the effect that generative AI

could have on creative people whose work it could replicate, as

well as the engineers who build the technology.

"Absent competition to compensate creators for their works,

AI companies could exploit monopsony power on levels we have

never seen before," Kanter said at a Stanford University AI

conference co-hosted by the Justice Department in late May,

using a term that often refers to domination of labor markets by

one or a few employers.

The FTC, which recently moved to ban noncompete agreements, last

year flagged potential concerns with AI employers stifling

competition by blocking skilled workers from heading to rival

companies.

PARTNERSHIPS

In January, the FTC opened a wide-ranging inquiry into AI

companies and cloud service providers, ordering OpenAI,

Microsoft ( MSFT ), Alphabet, Amazon ( AMZN ), and Anthropic to

provide information on recent investments and partnerships.

"We are scrutinizing whether these ties enable dominant

firms to exert undue influence or gain privileged access in ways

that could undermine fair competition across layers of the AI

stack," FTC Chair Lina Khan said at the time.

The regulator also seeks to understand how the partnerships

with Big Tech influence strategy and "decisions around the

pricing of products and services; decisions around the granting

of access to products and services; and decisions around

personnel."

Khan said at the University of Chicago conference that part of

the aim in scrutinizing partnerships is to "ensure that they are

not a way to sidestep merger review."