CMA carries out initial review of AI Foundation Models

May 4, 2023

SCL members will be aware that foundation models are a type of AI technology that are trained on vast amounts of data that can be adapted to a wide range of tasks and operations. Foundation models have many possible applications including chatbots, writing assistant and code writing, and generation of images for artistic or commercial purposes. Whilst they can be used directly consumers, new products and services that utilise the technology are already being developed by new and existing businesses. Foundation models may also be used by organisations to automate some parts of their processes or workflow. Recent communications of foundation models include OpenAI’s ChatGPT, Microsoft’s Bing Chat and integrations with 365, Google’s Bard and Anthropic’s Claude.

In the AI White Paper of March 2023, the UK government asked UK regulators, including the CMA, to think about how the innovative development and deployment of artificial intelligence can be supported in line with the five overarching principles of: safety, security and robustness; appropriate transparency and explainability; fairness; accountability and governance; and contestability and redress.

Supporting open, competitive markets, protecting consumers and businesses from unfair behaviour, and enabling innovation to thrive are core to the CMA’s mandate. The CMA says that it is therefore launching this initial piece of work to help create a shared understanding of:

  • how the competitive markets for foundation models and their use could evolve;
  • what opportunities and risks these scenarios could bring for competition and consumer protection; and
  • which principles can best guide the ongoing development of these markets so that the vibrant innovation that has characterised the current emerging phase is sustained, and the resulting benefits continue to flow for people, businesses and the economy.

Across each of these themes, in addition to refining the CMA’s understanding of how the market currently works, it will also consider some of the ways it may develop in the near future. This will help inform principles that will best guide the ongoing development of foundation models for the public good.

The CMA says that this focus is also consistent with its strategic priority to ensure effective competition in emergent markets as set out in its annual plan.

The development of AI has raised several other issues, including safety; security; privacy; intellectual property and copyright; and human rights. These issues are being considered by other regulators and the government. The CMA’s work will focus on the questions that the CMA is mandated and best placed to address, namely questions around competition and consumer protection.