Monopoly Power Is the Elephant in the Room in the AI Debate

Max von Thun is the Director of Europe and Transatlantic Partnerships at the Open Markets Institute, an anti-monopoly think-tank. Shutterstock In late September, Amazon announced a sweeping new “strategic collaboration” with leading AI startup Anthropic worth several billion dollars. The deal involves an unusual degree of coordination between the two companies, with Anthropic committing to using Amazon’s cloud infrastructure and proprietary chips to build, train, and deploy its foundation models, while giving Amazon’s engineers and platforms privileged access to those models. In return, Amazon will invest up to $4 billion in Anthropic and acquire a minority stake in the company.  While the deal may not look problematic at first glance, it is just the latest example of Big Tech’s efforts to corner the nascent generative AI market through strategic investments and partnerships. In exchanging model access for use of the highly concentrated computing resources they own and control, the tech giants are effectively buying themselves an insurance policy, ensuring that even if their own in-house AI efforts flop, their digital dominance will be maintained.  Microsoft’s $10 billion partnership with OpenAI, which similarly gives Microsoft privileged access to OpenAI’s technology while locking its dependence on Microsoft’s cloud computing infrastructure, is another clear illustration of this strategy. Other leading startups that have inked major deals with Big Tech firms include Hugging Face (Amazon), Cohere (Google, Nvidia), Stability AI (Amazon) and Inflection AI (Microsoft, Nvidia). These partnerships appear to be serving the same purpose as “killer acquisitions” in the past – think of…Monopoly Power Is the Elephant in the Room in the AI Debate