AI Adoption and Market Implications
The rapid pace of artificial intelligence (AI) adoption highlights its transformative impact. Notably, ChatGPT reached 1 million users globally in just five days, compared to years or decades for previous technologies like telephony and internet.
Advancements in AI Technology
- AI has existed for over 50 years, but recent advancements have accelerated its growth.
- Key advancements include faster chips, superior algorithms, cheap storage, and abundant training data.
Corporate Strategies and Legal Challenges
Companies like Airtel have formed strategic partnerships to leverage AI technology. Airtel's partnership with Perplexity allows customers access to advanced AI models, expanding Perplexity's footprint and access to user data.
- Such partnerships are exclusive and have raised concerns about competition.
- Reliance Jio and OpenAI are exploring similar partnerships to offer cheaper subscription plans for ChatGPT in India.
Competition Concerns and Regulatory Actions
Exclusive deals in digital markets pose competition risks due to network effects. The Competition Commission of India has previously condemned unfair practices like pre-installation of apps.
- Historical cases include Microsoft's bundling issues and Facebook's Free Basics initiative, which led to net neutrality regulations in India.
- The Airtel-Perplexity partnership risks creating a 'walled ecosystem' that limits competition.
Need for Proactive Regulation
A new report urges proactive regulation to tackle tech 'gatekeepers' and practices like bundling. Big Tech resists regulation, especially ex-ante measures, fearing long-term impacts on competition.
- Perplexity's dependence on foundational LLMs from companies like OpenAI ties its growth to Big Tech.
- Prominent tech leaders investing in Perplexity make it unlikely to emerge as a true competitor to Big Tech.
Conclusion
Market authorities must demand transparency, assess partnerships rigorously, and remain vigilant to anticompetitive practices. The allure of 'free' access should not overshadow long-term competition and consumer choice implications in India's digital economy.
Note: The views expressed are personal and do not necessarily reflect the opinions of Business Standard.