AI Regulation May Consolidate Market Power, Stifle Competition

As AI regulation emerges globally, the unintended consequence could be an increase in the market power of the largest tech companies, potentially stifling competition and amplifying inequality.

• AI regulation is emerging as a global patchwork with the EU and the White House unveiling bold regulation proposals. However, these regulations may inadvertently increase the market power of the largest tech companies, potentially stifling competition.
• AI development is being led primarily by industry, not government, with the U.S. private sector's share in the biggest AI models spiking from 11% in 2010 to 96% in 2021.
• Companies that fail to meet high minimum standards in the Office of Management and Budget’s draft AI policy could be frozen out of lucrative government contracts and R&D opportunities as of August 2024.
• AI harms fall disproportionately on people who are already marginalized, underserved and over-surveilled, amplifying inequality and placing the burden of addressing algorithmic injustice on the impacted communities.
• OpenAI, created to advance general purpose AI in a way that “benefits humanity,” faced a data breach, produced ‘hallucinations’ and toxic content, and was quickly used to supercharge scams. This led to investigations and lawsuits, raising questions about the efficacy of self-regulation in the AI industry.

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