posner28_George B. Luks_antitrustcartoon George B. Luks

The AI Octopus

If artificial intelligence lives up to its promise and becomes the lifeblood of every sector of the economy, we can expect a future of economic concentration and corporate political power that dwarfs anything that came before. Collusion and coordination among a handful of players make that outcome all but inevitable.

CHICAGO – With long-gestating antitrust cases against Google, Apple, and Amazon coming to fruition, many observers think that 2024 could be a turning point for Big Tech. Yet even as authorities press ahead with this litigation, they risk being blindsided by the rise of artificial intelligence, which is likely to reinforce Big Tech’s dominance of the economy.

The recent firing and rehiring of OpenAI CEO Sam Altman was interpreted as a conflict between cautious board members who worried about the risks of AI and enthusiasts like Altman. But the real significance of this episode was what it revealed about OpenAI’s relationship with Microsoft, the largest investor in OpenAI’s commercial operations. While OpenAI’s nonprofit structure nominally means that only its board controls it, the board was forced to rehire Altman after Microsoft expressed misgivings that helped instigate an employee revolt.

Microsoft is not just an investor in OpenAI; it is also a competitor. Both companies develop and sell AI products, and Microsoft had stopped short of acquiring OpenAI to avoid antitrust problems. But if Microsoft controls or partly controls OpenAI, the two companies may have an illegal collusive relationship. That is why the US Federal Trade Commission and the United Kingdom’s competition authority are both investigating the matter.