How Google and Microsoft’s push for regulation could stifle competition

The push by Big Tech companies such as Microsoft and Google to regulate artificial intelligence could stifle competition and hinder innovation.

In recent days, prominent Big Tech figures, such as former Google CEO Eric Schmidt and OpenAI CEO Sam Altman, have warned the public about the dangerous possibilities of the technology and called for federal and international rules on the industry.

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The most prominent companies are the ones forming the rules that will rein in their business and those who could be their future competitors.

“The world we live in now is one where Microsoft and OpenAI are going to lead a charge for some sort of regulation,” Adam Thierer, senior fellow at the R Street Institute, told the Washington Examiner.

Microsoft President Brad Smith proposed a five-point plan on Thursday for the regulation of artificial intelligence. It included building safety networks and brakes, developing a broad legal structure to regulate the technology, encouraging transparency about the training of models, and partnering with private companies to address the social issues connected to AI, such as unintentional bias.

Altman argued in a blog post that international authorities must consider forming the AI equivalent of the International Atomic Energy Agency, an intergovernmental forum for encouraging cooperation regarding nuclear sciences. He also called for the establishment of a new federal agency to provide licenses to AI developers.

Google echoed Microsoft’s concerns and released a set of priorities for regulation that include maximizing economic promises, promoting responsibility regarding the technology’s use, and enhancing national security to ensure the technology isn’t abused.

While the industry is calling for artificial intelligence rules and regulators now have support from the industry, free market proponents fear that the effort is self-serving. “The rules would make competition much harder,” said James Czerniawski, senior tech policy analyst at the right-leaning think tank Americans for Prosperity.

The newly proposed rules would “crush not only new entrants but absolutely decimate open source software providers of AI systems; there’s just absolutely no way they could comply with the sort of regime that Microsoft and OpenAI are talking about,” Thierer argued.

For example, if an individual developer wanted to experiment with a high-level advanced AI on an open-source platform, they would, theoretically, have to get a license based on the level of intelligence of the bot. This license would likely be somewhat expensive and take time, adding additional costs.

Altman is far from the first leader in the Big Tech industry to push for regulation of his own company actively. As one recent example, Facebook ran a long advertising campaign asking Congress to change Section 230, a key law that protects websites from being held accountable for what others post on their platform. Facebook’s campaign asked for amendments to Section 230 to hold it and competitors accountable for illegal content posted to their platform unless they have a system installed to moderate content for them, a choice that would penalize smaller companies that lack the funds required to buy appropriate software.

Altman isn’t OK with just any rules, however. The OpenAI CEO threatened to pull out of Europe over its quickly passing AI Act, only to reverse the threat on Friday. Key committees at the European Commission voted to advance the AI Act, which would establish bans on biometric surveillance, emotional recognition, predictive policing, and other AI-powered products. It would also require AI products to be transparent about the data used to train them.

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Congress and the White House are both eager to oblige with these calls for AI regulations. Sen. Michael Bennet (D-CO) has introduced legislation to create a task force investigating AI policies and their effect on civil liberties.

Senate Majority Leader Chuck Schumer (D-NY) previously announced he was working on legislation with experts that would regulate AI in a manner acceptable to Republicans and Democrats.

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