The Competition and Markets Authority (CMA) has raised concerns about AI foundation models (FMs) and the “whirlwind pace” of their development.

The regulator said it had identified an “interconnected web” of over 90 partnerships involving the same firms such as Google, Apple, Meta and Amazon.

In an update to an initial report last year, the CMA said a small number of technology firms already hold positions of power in many important digital markets and have strong positions in both the development and deployment of FMs through apps and platforms.

The organisation went on to say that while it recognises the resources and expertise that these firms can bring, these partnerships should not prevent rival firms from competing.

The CMA added that it is vital to safeguard against the overdependence on a handful of major firms, especially considering the wide range of potential use cases for FMs in several industries.

The CMA said it had found three interlinked risks to fair, effective and open competition. These include firms controlling critical inputs for FMs which may restrict access and prevent competition and powerful incumbents potentially exploiting their positions in markets to distort choice in FM services and restrict competition in deployment as well. The CMA also warned that partnerships involving key players could exacerbate existing positions of market power through the value chain.

Speaking at a conference in Washington DC Sarah Cardell, chief executive of the CMA, said harnessing new technology must be done in a way that benefits everyone whilst preventing potential exploitation of market power.

“When we started this work, we were curious,” she said. “Now, with a deeper understanding and having watched developments very closely, we have real concerns,”

Continued Cardell: “We’re committed to applying the principles we have developed, and to using all legal powers at our disposal – now and in the future – to ensure that this transformational and structurally critical technology delivers on its promise.”

In January this year, the CMA revealed how it intends to operate the new digital markets competition regime as currently proposed by the Digital Markets, Competition and Consumers (DMCC) Bill in a move which will give Big Tech companies greater access to their rivals’ data and limit them from promoting their own products.

If the CMA finds businesses are using their status to gain an unfair competitive advantage, it will take targeted and proportionate action to address the behaviour. In some cases, this will mean imposing conduct requirements on firms in relation to the digital activity for which they have been designated, the regulator said.

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