Recent reports have surfaced that the US Department of Justice (DOJ) is joining the EC and CMA in examining the AI industries incestuous practices, notably the sharing of board members.
This begs the question, which is more important, national technological supremacy, or the competitiveness of the free market? The conflict between reckless, unfettered innovation and protecting citizens and nascent startups, has taken a small turn in favour of the latter.
They just can’t get enough AI
The cyberspace race aside, regulators—specifically the DOJ—seem to have awoken to the conclusion they needn’t skimp entirely on regulating AI. Well, AI governance at least. AI FOMO (fear of missing out) remains pervasive, just look at the UK’s desire to become a global AI superpower and Astera Labs and Maruwa, companies proximately linked to AI with rapidly increasing share prices.
However, the EU AI Act that comes into force this year takes a firmer risk-based approach, so much so that more than 150 executives from companies including Renault, Heineken, Siemens, and Airbus signed a letter suggesting it would “jeopardize Europe’s competitiveness and technological sovereignty.”
Don’t stop the party, or in this case please do
The glaring concentration of AI talent and development suggests impropriety concerning AI governance structures. The case of Reid Hoffman particularly, whose interests include the board of Microsoft, the board of OpenAI until 2023, a co-founder and board member of Inflection, and an investor in around 30 AI companies through Greylock Ventures.
These overlaps become particularly interesting in light of Inflection’s subsummation by Microsoft. The deal saw Microsoft pay Inflection approximately $650 million for access to Inflection’s models and to hire most of its staff, including former DeepMind co-founder Mustafa Suleyman. Most tellingly though, is that investors in Inflection—including Reid Hoffman-led Greylock Partners, Dragoneer and others—would receive 1.5x their initial investment.
Microsoft’s investment in Inflection is no doubt an attempt to diversify away from complete dependence on Open AI after Sam Altman’s dramatic firing and rehiring, and it is already being scrutinized by EU and UK regulators. Microsoft’s investments also include OpenAI, French startup Mistral, and now Abu Dhabi AI group G42, all of which are under scrutiny from various regulators.
Where is the love (for regulation)?
The DOJ’s use of anti-trust legal precedent to prevent succinctly named interlocking directorates, where individuals hold board positions with competitors, may prove a first meaningful step. And it is a singularly significant action for the nation which houses the majority of tech companies and deployable capital. US anti-trust scrutiny in this manner was rarely enforced until two years ago, when the Biden administration started cracking down, leading to resignations for directors of 25 public companies.
Tech, specifically AI, companies appear to be the next targets. Murmurs of new AI regulation can equally be heard in the UK.
The UK introduced a new law to counter deepfakes and it is reported that the UK competition agency is considering new measures. Perhaps a new trend of AI taming really will get started here.
