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1. 2024 :

THIRA| II TSCHREPFI.

2. Denk Competitive Dynamics and Chatenges

VCD

al

1, Competitive
dynamics in
Generative Al

2. Pro-active
competition
law and policy

3. 1. Competitive dynamics
in Generative Al

4. Social media GenAl
Search
Online store

5. Bend Competitive Dynamics ang Cratenges Deco

1.1. Can we confidently predict
who will 'win? No.
(computer science)

6. Gen Competitive Dynamics ang Chatenges ECD GrotSchrepel

BIG DATA

Just *big* data is the wrong focus:
1. Small datasets can compete with big ones
2. Small companies can access large amounts of data

= April 2023; Koala; A Dialogue Model for Academic Research
- February 2022: Retrieval-Enhanced Transformer
- June 2021: Low-Rank Adaptation (LORA)
- September 2020: Less Than One-Shot Algorithms
- February 2020: Dataset Distillation
= April 2017: Attention Is All You Need
-10Me- Sunthatie date

7. Grell Competitive Dynamics and Chatenges OECD @PrntSchrepel

COSTS

Today, it's expensive = favor big players

-OpenAl spent $540 million on the development of GPT-4 In 2022 alone
- OpenAl spends $700,000 per day to run ChatGPT (2023)

But tomorrow? Chip makers are lowering these costs (Nvidia's
latest GPU cut the price of training LLMs from $10 million with 960
CPUs down to just $400,000) + new model compression and
algorithms that lower costs: one can train and run “good enough’
LLMs on a single GPU (even smartphones) in just a few of hours +
federated learning is pushing

Pageé

8. ea Competitive Dynamics as Cäatengen eth

CAPITAL

Private Investment in generative Al, 2019-33

‘ese he DS Car A pe

9. Deal Competitive Dynamics ang Chatenges DECO efrotSctuwpel

Less than 50 employees
(https://Awwew.crunchbase.com)

= Ann -arandinity

10. The Al community
building the future.

source

11. Denk Competitive Dynamics and Chatenges OECD @hentächnupel

ACCESS

‘Open’ foundation models
power strong competitive dynamics:

1. They can be forked (1000 forks on Llama 3 in one weekend) = diversity
2, They include limited/distributed amendment and termination provisions
3. They include “anti-opportunism’ provisions
4. They do not restrict interoperability / access to the API = little leveraging
power (address many antitrust concerns)

12. 1.2. Does this imply that GenAl
won't experience dominance? No.
(complexity science)

13. Denk Competitive Dynamics and Chatenges OECD @PentSchnepel Page 12

INCREASING
RETURNS

Significant increasing returns:

1. No immediate "learning effect’:
not like search/socials, more like operating systems

2. But "ecosystem effects":
interaction between different layers
(infrastructure - models - apps)

14. Grell Competitive Dynamics ang Dingen

2. Pro-active competition
law and policy

15. Grell Competitive Dynamics ang Cratenges OECD @PentSchnepel Page Ih

1. Follow increasing returns

a

Target practices

diminishing these

returns = freezing
the ecosystem

What generates
these returns?
(snowball effect)

16. ‘endl Competitive Dynamics and Chastenges Dec @FrotSchrepel Pages

1. Follow increasing returns

How effective is os A
the practice? 6 Ms ¿Pd

Depends on the
ability to enter @openal Mas ANTHROP\C Ai tocaban mols

frozen layers

asm avs

17. Beni Competitive Dynamics ang Chatenges DECO G?rotfichrepel

2. Deploy computational
antitrust

E.g.: Audit code and T&C
- Track changes in the API (for the closed' ones)
- Track changes in access terms to models (for the ‘open’ ones)
= Track changes to non-compete provisions
- Track changes to interoperability terms

73

18. Bend Competitive Dynamics and Chatenges BETH al Faget?

3. Document regulatory
barriers (and captures)

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Article 53 of the Al Act + Annex NI

19. Dec Competithee Dynamics and Chatenqes Deco @PentSchrepel Page

4, Exempt open systems

1. Forming joint ventures 2. Forming strategic alliances 3. Creating/extending R&D
(between 0S/0A companies) without facing cartel exemption to antitrust law
without notifying antitrust sanctions (sharing up-front (25% + rivalry)

agencies costs, marketing networks,

and technical knowledge)

20. ‘Geel Competitive Dynamics and Changes

[email protected]

21. 2024 :

THIRA| II TSCHREPFI.