UK competition regulator warns on AI foundation model market concentration

The UK’s Competition and Markets Authority published an update to its ongoing review of foundation-model markets, moving from an exploratory stance to one it described in sharper terms. Chief executive Sarah Cardell said: “When we started this work, we were curious. Now, we have real concerns.”

The update identified an “interconnected web” of more than 90 partnerships and strategic investments linking six firms — Google, Apple, Microsoft, Meta, Amazon and Nvidia — across the foundation-model supply chain, from chips and cloud compute through to model development and consumer-facing products. The CMA set out three specific risks: that firms controlling critical inputs such as compute, data or talent could restrict competitors’ access to them; that companies with existing consumer-facing power could tilt competition in foundation-model services toward their own products; and that the web of partnerships could let market power in one part of the chain reinforce power elsewhere in it.

The report stopped short of announcing enforcement action but flagged closer scrutiny of mergers and partnership arrangements going forward, including continued examination of Microsoft’s relationship with OpenAI as part of the CMA’s cloud-services investigation, and said the authority would consider the sector’s priority for review under new powers expected from the UK’s Digital Markets, Competition and Consumers legislation.

The intervention placed the UK among the first regulators to formally name the specific web of big-tech investments in frontier AI labs — rather than the labs’ market conduct alone — as a competition concern, a framing US and EU antitrust bodies took up in overlapping investigations of the same period.