JFTC will conduct a study on the generative AI market; Wary of sequestration by IT giants

The Japan Fair Trade Commission (JFTC) has decided to launch an investigation into the generative artificial intelligence market. Some worry about the impact of generative AI on domestic businesses, as US IT giants and other companies increasingly seize the data, semiconductors, human resources and other resources needed for its development. The aim is to identify problems with anti-monopoly regulation at an early stage and promote healthy competition in the market.

JFTC will soon release materials showing competitive issues surrounding generative AI, request a wide range of information on the actual state of the market, and conduct interviews with domestic and foreign companies and experts. Given the rapidly changing market conditions, the results of the study will be made public if necessary.

The development of generative AI requires data for learning, semiconductors and computers to process the data, and highly qualified personnel. However, such development resources would be concentrated among US IT giants, such as Google LLC, Microsoft Corp. and Meta Platforms, Inc. Some data indicates that the American company Nvidia Corp. has a 90% share of the AI-related semiconductor industry. market.

The JFTC has identified the following specific areas of research: usage restriction, where large companies with strong positions restrict the use of semiconductors and data to deny opportunities to new entrants; and human resource capture, where companies transfer talented personnel from startups to their own companies through alliances and other methods. The research will also examine the preferential treatment of companies that provide generative AI services, using the results of the generation process to generate many of their own products and services.

Antitrust authorities abroad are also increasing their scrutiny of the generative AI market. In July, authorities from the United States, the European Union and other countries issued a joint statement saying they would jointly address competition risks.