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Working paper

Competition and cooperation in AI: How co-opetition makes AI available to all

Christophe Carugati

11 March 2024

Generative AI

Co-opetition in AI combines competition and cooperation to make AI available to all. While competition risks are yet to materialise, competition authorities should propose a code of conduct applicable to all cloud providers based on principles of access, choice, non-discrimination, and flexibility.

Executive Summary

 

Co-opetition combines the advantages of competition and cooperation between firms to create new business opportunities. Large cloud providers and Generative AI (GenAI) developers engage in a co-opetition framework to make AI available to all.

 

Markets can deliver their full benefits in a co-opetition framework. Cooperation maximises opportunities and innovation by ensuring the development and deployment of AI models and applications. At the same time, competition acts as a safeguard, mitigating risks by exerting competition pressure on existing models and AI-powered applications developed or hosted by the cloud provider.

 

At this early development stage, the risks associated with co-opetition on investment, competition, and innovation remain largely theoretical and have yet to materialise. The most likely risks are competition risks due to potentially ant-competitive agreements, like sensitive information exchange, anti-competitive behaviours, like tying, bundling, and self-preferencing, and increased market concentration in the hands of large tech firms.

 

Swift market intervention to preserve the competition process is already under discussion. However, such an intervention is premature considering ongoing market studies on competition and GenAI and the rapid market and regulatory developments.

 

However, competition authorities should establish market and regulatory conditions conducive to ensuring positive competition outcomes for AI while preserving the incentive to innovate through co-opetition. They should propose a code of conduct applicable to all cloud providers based on principles of access, choice, non-discrimination, and flexibility.


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About the paper

This paper is part of our GenAI and Competition Hub, which strives for responsible generative AI (GenAI) development, ensuring favourable market conditions that benefit all. Contact us to join the Hub as a member and/or for consultation/press inquiries.

About the author

Christophe Carugati

Dr. Christophe Carugati is the founder of Digital Competition. He is a renowned and passionate expert on digital and competition issues with a strong reputation for doing impartial, high-quality research. After his PhD in law and economics on Big Data and Competition Law, he is an ex-affiliate fellow at the economic think-tank Bruegel and a lecturer in competition law and economics at Lille University.

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