The Rise of Generative AI: Regulators Keeping an Eye on Competition

As the generative AI market continues to grow at a rapid pace, regulators in Japan and South Korea have initiated inquiries to assess the competitive landscape and potential anti-competitive practices. Both countries are concerned about the possibility of market dominance by a few players and the impact on fair competition.

Japan looking at AI competition across all layers of technology

In Japan, the Fair Trade Commission has started a comprehensive market study on generative AI, focusing on competition at the infrastructure, model, and application levels. The regulatory body is keen on maintaining a fair and competitive environment to support the growth of the generative AI sector in the country.

The infrastructure layer

The JFTC is examining issues such as the dominance of NVIDIA in GPUs, differences in training data between international and Japanese models, and challenges faced by Japanese firms in retaining AI talent against global competitors.

The model layer

While international models lead in certain areas, Japanese players are differentiating themselves by focusing on Japanese language performance and creating specialized models for specific business applications.

The application layer

At the product level, the JFTC aims to identify obstacles and challenges in promoting fair competition among businesses using generative AI applications.

Competition concerns include access to GPUs

The JFTC is investigating potential market behaviors in generative AI, including access restrictions to GPUs, self-preferencing of AI models, tying of service provision to model usage, and parallel conduct using generative AI. The regulator is vigilant about ensuring fair competition in the AI market.

Korea to examine AI market share concentration

South Korea’s Fair Trade Commission is also looking into market concentration in the AI sector and potential barriers to entry that may hinder competition. The investigation will focus on major players in the market and aims to promote innovation and fair competition in the industry.

Australia is also watching generative AI competition

Australia’s competition regulator, the ACCC, is closely monitoring developments in the generative AI market. The upcoming Digital Platform Services Inquiry report will explore competition issues related to generative AI, including barriers to entry and the impact on market power by large digital platforms integrating LLMs.

Regulators around the world are recognizing the importance of maintaining a competitive environment in the rapidly evolving generative AI sector. By keeping a close eye on market dynamics, they aim to ensure fair competition and promote innovation in AI technology.