The Biden era of antitrust has come and gone, and now big decisions remain on how the Trump administration will handle antitrust policy going forward—especially when it comes to budding industries like artificial intelligence. The United States cannot afford to treat AI competition policy like the Biden administration treated technology competition generally. That approach could set the United States back decades in AI innovation and competitiveness.
That is why Congress was right to probe the AI competition views of FTC Commissioner nominee, Mark Meador, last week in his confirmation hearing before the Senate Committee on Commerce, Science, and Transportation. Mr. Meador did not comment on the specifics of cases, as is appropriate and proper, but in some ways, Mr. Meador hit the right notes anyway. For example, he rightly asserted the best way to reduce bias in AI is with better models, implying that the FTC’s heightened Biden-era criticisms were misplaced.
Whether models improve from increased competition or increased economies of scale is debatable—but Mr. Meador need not lose sleep on the matter because the AI market is already brimming with healthy competition. Regulators should prioritize not messing it up.
Just last year, artificial intelligence startup funding hit a record $97 billion. Those investment dollars support the 4,643 AI startups in the United States. In fact, Google, Meta, and Microsoft are some of their biggest investors.
Startups are successful in part because investments, mergers, and acquisitions can connect their talent and novel ideas with larger technology companies that can give them the resources they need to expand product reach and access consumers. Indeed, many startups formulate business plans with the sole intent to become acquired by larger firms. Inventing is their way of life. Cutting off their exit paths would increase, not decrease, market competition.
The reality then is that best thing the FTC could do to promote American competitiveness in AI is to distance from the standard practices of Biden-era competition enforcement. In the eyes of the Biden-era FTC, and to a lesser extent the DOJ, a “big is bad” mentality dominated antitrust conversations. Amidst heightened scrutiny, our analysis at the American Consumer Institute (ACI) found that post-complaint abandonment rates of merger deals more than tripled during this time. Large technology companies were investigated—and sometimes punished—for their size, regardless of their impact on consumer wellbeing, thereby weakening American competitiveness in the technology sector. It all had a chilling effect on innovation.
Should those views be applied to budding technologies like artificial intelligence, certain high-stakes improvements and inventions may have never passed scrutiny—or they would have quickly been tied up in investigations and lawsuits.
OpenAI recently announced the Stargate Project—an investment of $500 billion over four years—which will involve major companies collaborating to build the AI infrastructure of the future. Imagine the criticism that would have followed had this investment been announced during the reign of the Biden-era FTC under Lina Kahn, assuming the companies would have decided to announce it at all. AI development would likely have slowed, and consumers would have been penalized—or worse.
The history of mergers and acquisitions is replete with examples of how they can provide crucial connections for businesses that lead to significant consumer benefits. Meta’s acquisition of Instagram and WhatsApp helped expand services to far more consumers with features that would not be possible without Meta’s resources. Amazon’s acquisition of Whole Foods connected the grocery chain to Amazon’s massive logistics system and allowed the store to both expand and cut prices significantly. Specific to AI, Google once purchased then-startup, DeepMind, and merged it with its in-house development team, Brain. And now DeepMind stands as an AI titan.
Overeager enforcement by antitrust regulators has slowed the innovation of new products and services by meddling in normal market activities that provide value to consumers. It has sent a signal to American innovators that their business decisions—which are necessary to stay globally competitive—would be investigated, scrutinized, and deterred at every turn.
American entrepreneurialism, ingenuity, and stubbornness overcame it anyway. The budding American AI sector is already chock-full of healthy competition. Imagine what American innovators could do without counterproductive meddling by Uncle Sam’s competition enforcers.
Logan Kolas is the Director of Technology Policy and Trey Price is a policy analyst at the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, follow us on X @ConsumerPal.