The AI industry is filled with potential conflicts of interest

Last month, the Justice Department revealed that it’s closely monitoring the AI industry for potential conflicts of interest stemming from the widespread presence of shared board members between AI competitors.

• Federal officials said maintaining competition remains their top priority as the private industry turns its focus to AI.
• But they also noted that companies sharing board members can lead to conflicts of interest that end up slowing innovation and disenfranchising workers, shareholders, and consumers.

Interest-ing… Microsoft is a prime example of overlap within the industry. The tech giant has positioned itself as an AI frontrunner through its ~$13 billion investment in OpenAI, where it holds a non-voting board seat and serves as a strategic partner.

At the same time, Microsoft has invested a combined $2+ billion in startups Mistral, G42, and Inflection AI – all three of which are technically competing with Microsoft, OpenAI, and each other to build generative AI technology.

A few other examples:

• Amazon, which recently completed a $4 billion investment in Anthropic, has a board member who leads the venture capitalist AI Fund, and has made numerous exclusive AI investments.
• Meta’s board includes a16z co-founder Marc Andreessen, whose VC fund has invested in generative chatbot startup Character.AI, as well as Elon Musk’s buyout of X/Twitter (meaning a16z likely owns equity in Musk’s chatbot startup xAI).
• Google – which has its own AI chatbot and is invested in Anthropic – has a board member who also serves on the board of Salesforce, another major AI player with investments in Anthropic, Mistral, and Together AI.

📝 Bottom line: With nearly every major tech company developing their own AI product verticals, Big Tech firms could end up competing directly with the start-ups they – or their board members – invest in.

And, in a worst case scenario, this could lead to collusion and/or monopolistic conduct in the AI industry, since overlapping board members across companies would incentivize avoiding competition in certain product domains, or in hiring specific AI engineers.

📊 Flash poll: In your opinion, should regulators be concerned about the potential conflicts of interest within the AI industry?

• Yes
• No
• Unsure/other

Editor’s note: Once again, there aren’t any op/eds today due to a lack of available coverage.