Nate Bartholomew

Nate Bartholomew is a summer associate attending Harvard Law School.

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On June 29, 2023, the Federal Trade Commission (“FTC”) posted a blog to its website expressing concerns about the recent rise of generative artificial intelligence (“generative AI”). To get ahead of this rapidly developing technology, the FTC identified “the essential building blocks” of generative AI and highlighted some business practices the agency would consider “unfair methods of competition.” The FTC also underscored technological aspects unique to generative AI that could raise competition concerns.

What is Generative AI?

Traditional AI has existed in the marketplace for years and largely assisted users in analyzing or manipulating existing data.  Generative AI, on the other hand, represents a significant advance with its ability to generate entirely new text, images, audio, and video. The FTC notes that this content is frequently “indistinguishable from content crafted directly by humans.”

What are the “essential building blocks” of generative AI?

The FTC identified three “essential building blocks” that companies need to develop generative AI. Without fair access to the necessary inputs, the FTC warns that competition and the ability for new players to enter the market will suffer.

  • Data. Generative AI models require access to vast amounts of data, particularly in the early phases where models build up a robust competency in a specific domain (for example, text or images). Market incumbents may possess an inherent advantage because of access to data collected over many years. The FTC notes that while “simply having large amounts of data is not unlawful,” creating undue barriers to access that data may be considered unfair competition.

Continue Reading The Federal Trade Commission and Generative AI Competition Concerns