United Kingdom: Published CMA updated review of competition in artificial intelligence models

On 11 April 2024, the Competition and Markets Authority (CMA) published an updated review of competition in the AI Foundation Models market. The CMA has identified 3 critical risks to effective competition in the AI Foundation Models sector, expressing concerns about the potential negative impacts on the market. As the sector develops rapidly, the CMA has noted the dominance of a few incumbent technology firms that could distort market dynamics by leveraging their substantial resources and market power. These firms exert influence over the development and deployment of foundation models, controlling vital inputs such as computing power, data, and expertise and holding key market access points. The CMA's report follows its initial report last year, which proposed principles to guide the market towards innovation and positive outcomes for businesses and consumers. The CMA's update report outlines an interconnected web of over 90 partnerships and strategic investments among leading firms, raising concerns about their potential to shape the market in their interests. In response, the CMA has outlined plans to conduct further investigations and take action to address these issues. This includes close monitoring of the market, reviewing existing and emerging partnerships, and applying merger control when necessary to ensure that competition remains fair and effective. The CMA will publish a further update in Autumn 2024.