The Competition and Markets Authority (CMA) has launched a review into AI Foundational Models, that is currently ongoing. This review hopes to achieve three things.  

Link: AI Foundation Models  

1. Offer an understanding of the market AI Foundational Models and how these markets could evolve.  

2. Identify the risks and opportunities these models offer.  

3. Set guiding principles to protect competition and consumers. 

This page shares the following resources: -  

• Summary (PDF) 

• Short Report (PDF) 

• Full Report (PDF)  

• Press notice: propose principles to guide competitive AI markets and protect consumers (HTML) 

• Launch document (PDF)  

Full Report 

Introduction 

• How we conducted the review 

• The structure of this report 

Background  

• What are FMs?  

• How are FMs developed?  

• Data preprocessing and architecture design 

• Computing power  

• Deployment routes to market and monetisation strategies  

• AI supply chains and vertical relationships  

• How FMs are evaluated  

• The FM landscape  

• Potential applications of FMs  

Competition and barriers to entry in the development of FMs  

• Introduction  

• Data requirements  

• Computational resource  

• Technical expertise  

• Access to funding  

• Open-source models  

• Uncertainties  

• Will access to proprietary data become necessary? 

• Will models become larger? 

• Will FMs be highly generalised? 

• Is cutting-edge performance required to compete? 

• Will large technology companies and first movers have an advantage over others?  

• Will open-source models remain a key part of the market?  

The impact of FMS on competition in other markets  

• Deploying FMs in downstream markets  

• FMs could become an important input in a wide range of markets 

• Firms can access FMS in a number of ways  

• Firms are monetising FM services in a number of ways  

• Potential impacts of FMs on competition in downstream markets, including risks from vertical integration  

• How FMs could drive competition and disrupt incumbent firms  

• Different types of vertical integration and partnerships 

• Features of downstream markets that could affect competition in upstream development 

• Uncertainties  

• Will downstream firms continue to have access to a wide range of FM deployment options and find it easy to switch between them?  

• Will consumers be able to make choices between FM services effectively?  

• Will consumers prefer integrated and customised FM services?  

• Would vertically integrated firms and partnerships have an incentive to foreclose upstream and downstream competitors?  

• How significant are data feedback effects in downstream markets?  

Consumer protection  

• Consumer protection concerns identified in our review 

• Potential for user manipulation  

• FMs and advertising  

• Consumer  

• Technical measures to address possible consumer harms  

• Uncertainties  

Competition and consumer protection law and the role of regulation  

• The legal framework in the UK and its application to AI  

• The UK’s policy approach to AI  

• A pro-innovation approach to AI  

• International approaches to AI  

• Industry initiatives  

• Interaction between competition, consumer and other policy objectives  

Principles  

Next steps