On 2 October 2024, the Japan Fair Trade Commission (JFTC) opened a public consultation on the rapidly evolving market of generative Artificial Intelligence (AI) and on its discussion paper on Generative AI and Competition. The consultation remains open for public feedback until 22 November 2024. According to the discussion paper, generative AI markets consist of three layers: infrastructure, models, and applications. The infrastructure layer includes computing resources (especially GPUs), data, and expertise. The model layer focuses on the development of generative AI models and is highly competitive. The application layer of the generative AI market is where businesses develop and offer AI products such as text, code, image, video, and audio generation. The paper highlights several cross-layer issues, particularly the reliance of AI developers on cloud services provided by major firms, changes in development environments, open-source vs close-sourced approaches, and the role of partnerships. The JFTC also identifies key competition concerns related to the Antimonopoly Act, including access restrictions, self-preferencing, and tying cloud services with specific AI models could limit market access for other developers.
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