On 4 May 2023, the UK’s Competition and Markets Authority (CMA) announced the start of an initial review of the artificial intelligence infrastructure model market. Through this first review, the CMA aims to gain an early understanding of the principles of competition and consumer protection that can best guide the market development of AI-based models in the UK.
The launch of this review follows the CMA’s mandate from the UK government to consider how the innovative development and deployment of AI can be supported based on five overarching principles.
- Safe, secure, robust.
- Appropriate transparency and “explainability”.
- fairness.
- Accountability and Governance.
- Objections and Remedies.
Depending on the CMA’s findings, the initial review could presage a more in-depth ‘market survey’ of the UK underlying model market. The CMA may also use any findings to inform recommendations to the UK Government regarding future legislative and regulatory changes affecting this sector.
What is the underlying model?
At a high level, an underlying model is a type of AI system that is trained on large unlabeled datasets and requires a large amount of computing resources to enable such training. These models can be fine-tuned or trained within a specific context to serve as the foundation or “foundation” for a variety of AI applications that may be deployed. Prominent examples are:
- Open AI’s ChatGPT-4 and other large-scale language models enable you to generate natural language responses to user prompts and interact with them in a consistent, conversational fashion.
- Stability AI’s Stable Diffusion and other text-to-image models. It can be used to generate surreal images based on the user’s text prompts.
CMA Initial Review Scope
The three main areas of focus for the first review of the CMA are:
- Competition and barriers to entry in the development of underlying models – e.g. access to the data and computing resources needed to train these models, access to personnel and funding, these underlying models disrupting or enhancing their position of the largest companies such as the way.
- The potential impact of the underlying model on competition in other markets. For example, the impact of certain underlying models and related functions that may be managed by a limited number of large organizations that a company needs to compete effectively in other markets.
- Consumer protection – relating to false and/or misleading information generated as output from technology supported by such models, for example regarding risks arising from the use of the underlying models in products and services available to consumers; including those that
The relatively narrow scope of this review is consistent with the CMA’s mandate as the UK’s competition and consumer protection regulator. However, the CMA’s announcement emphasized that the review is intended to be carried out in line with the UK government’s March 2023 AI white paper, which will develop an innovation-enhancing approach to AI regulation in the UK. It sets out the government’s policy plan on
CMA Next Steps – And How To Join
In addition to collating and evaluating existing research in this area, the CMA relies on a variety of evidence sources to perform analyzes in the areas of focus listed above, including:
- Voluntary Submissions: The CMA invites interested parties to submit reviews.
- Stakeholder information requests: The CMA will issue information requests to key stakeholders, including developers, researchers, and suppliers of inputs such as computing and data, as well as customers and investors.
- meeting: The CMA will also hold bilateral meetings with key stakeholders.
The evidence and analysis are reflected in a written report describing the CMA’s findings. This report will likely include guidance for suppliers, developers, businesses and end-users, as well as recommendations to the UK government on implementing the legislative and regulatory objectives set out in the recent white paper. .
Potential Impact and Consequences
The results of this initial review could help shape the UK’s burgeoning AI sector and help determine the role of the UK and UK companies in the global AI landscape. It could also have significant implications for UK and international companies looking to do business in the UK and leverage AI-enabled technologies and solutions.
If the CMA identifies competition or consumer protection issues with respect to the UK base model market or related industries, the CMA may investigate these further (eg through longer-term market research).
If the CMA receives evidence that companies operating in this area have violated competition or consumer requirements, it may also initiate enforcement action against alleged violations.
The UK’s focus on AI has seen significant growth in the field worldwide, as evidenced by the initiation of initial reviews, government white papers and recent guidance from other regulators such as the UK Information Commissioner’s Office. Consistent with extensive regulatory oversight and activity. glove. Despite the UK’s desire to establish itself as an AI hub for driving innovation, the CMA’s recommendations and UK government policy in this area will ultimately depend on the policy and regulatory approaches adopted by national authorities. can be shaped (more or less) by Other major markets (especially US and European Union).
timing
There are some important milestones to keep in mind.
- Submit your answer: If you would like to accept an invitation to submit comments or responses to the review from the CMA, the window to do so will close on June 2, 2023.
- CMA report: The CMA plans to release its findings in early September 2023.
How can we help?
If you have received a request for information or an interview from the CMA, or would like to submit a response to the review, please contact one of the Cooley attorneys listed below for assistance.
