164 | 💥 🔫 Shots Fired: FTC Opens AI Investigation

In today’s Brainyacts:

1. FTC investigates AI market

2. Don’t sleep on Google Bard (huge advancements)

3. Lots of Legal AI funding and other AI model news

4. Protect Taylor Swift and other related content

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Lead Memo

💥 🔫 Shots Fired: FTC Opens Investigation

In an era of rapid technological advancement, the role of regulatory bodies like the Federal Trade Commission (FTC) becomes crucial in maintaining a balance between fostering innovation and ensuring competitive fairness. Yesterday’s announcement by the FTC to investigate the investments and partnerships of major AI companies signals a shift towards more vigilant oversight in the red-hot market of artificial intelligence, particularly generative AI.

Why Investigate?

At the heart of the FTC's action is a concern that has become increasingly prevalent in the AI economy: the potential for large, dominant companies to stifle competition through strategic investments and partnerships. I have been noting some interesting developments that hint at anti-competitive behavior throughout Brainyacts.

This inquiry aims to determine whether these relationships between AI giants and smaller startups might be creating an anti-competitive environment that hinders innovation (or captures all of it) rather than promotes it. By ordering companies to provide detailed information on their AI-related dealings, the FTC is looking to peel back the curtain on the inner workings of the AI industry and assess whether these actions are in line with fair competition principles.

What Is Under Investigation?

The FTC's inquiry, invoking Section 6(b) of the FTC Act, is comprehensive. It not only requests information on the strategic rationale behind these partnerships and investments but also requires an analysis of their competitive impact. The FTC is digging deep, seeking to understand the governance of these relationships, potential impacts on product releases, and market dynamics. This inquiry is not merely surface level; it is a deep dive into the competitive mechanics of the AI industry.

Potential Outcomes

The range of outcomes from such an inquiry is broad. On one end of the spectrum, the investigation could conclude that these investments and partnerships are benign or even beneficial to the industry, serving to foster innovation and competition. On the other end, it could result in regulatory action if the FTC finds evidence of anti-competitive practices. This could include orders to cease certain practices, divestments, or even the restructuring of partnerships. In more extreme cases, it could lead to antitrust lawsuits, though as you likely can guess, such cases will face long drawn-out challenges in court.

Consumer and Business Implications

For consumers, the significance of this investigation cannot be overstated. The development of generative AI tools has the potential to revolutionize how we interact with technology, create content, and conduct business. If the market for these technologies becomes concentrated in the hands of a few, consumers may face higher prices, less choice, and slower innovation. Oh and unchecked surveillance (think about what Google and Meta already do with our personal info). 

For businesses, especially smaller startups, a fair competitive landscape is essential for their survival and ability to innovate. Without it, they may be squeezed out by larger entities with deeper pockets.

Looking Ahead

As the companies have 45 days to respond to the FTC's orders, the industry is poised for a period of introspection and perhaps apprehension. The investigation is not just about the present; it's about setting a precedent for how emerging technologies are nurtured and regulated. 

The FTC’s actions echo a broader global sentiment toward ensuring that the AI revolution benefits all, not just a concentrated few.

Now I am not a huge proponent of governments injecting themselves into the details of private or public companies, but this action represents a cautious step towards ensuring that the monumental benefits promised by AI technologies are not overshadowed by monopolistic practices. And that is not a bad thing.

For both consumers and businesses, the outcomes of this investigation will likely shape the future landscape of AI development and deployment, ultimately affecting how we all engage with these transformative technologies.

Here is the FTC statement.

More coverage on this:

Spotlight

🛡️🧑‍💻 Don't Sleep on Bard (Gemini Pro)

Google's Bard has just made a stunning leap, surpassing GPT-4 to the SECOND SPOT on the leaderboard!

This is all according to the Chatbot Arena devised and hosted by https://lmsys.org/blog/2023-05-03-arena/

What is Chatbot Arena?

Chatbot Arena is a cutting-edge benchmark platform designed specifically for evaluating and comparing the performance of large language models, the brains behind your favorite AI chatbots. Think of it as a virtual tournament where AI models go head-to-head in a series of challenges, answering questions and engaging in dialogues, all under the watchful eyes of a global audience.

How Does It Work?

• Anonymous Battles: In the Chatbot Arena, each contest is anonymous. This means that when two AI models compete, their identities are hidden. This ensures fairness and unbiased judgment by the audience.

• Randomized Matchups: The battles are randomized, adding an element of surprise and testing the AI models across a wide range of topics and scenarios.

• Crowdsourced Evaluation: The true judges in the Chatbot Arena are the people. Through a crowdsourced approach, a diverse audience from around the world asks questions, interacts with the AI models, and votes for the answers that they find most accurate, engaging, or witty.

Benchmarking with Elo Rating System

To rank the AI models, Chatbot Arena employs the Elo rating system. Originally devised for chess, the Elo system is a tried and tested method for rating players—or in this case, AI models—based on their match outcomes. Wins against strong opponents result in higher rating gains, while losses against weaker ones lead to significant drops. This dynamic rating system paints a clear picture of where each AI model stands in the global leaderboard.

See in the following graphic the most recent rankings based on the head-to-head matchups.

Why It Matters

The Chatbot Arena serves a crucial role in the advancement of AI technology. By providing a transparent, engaging, and competitive platform, it accelerates the development of more sophisticated, responsive, and intelligent AI models. This continuous cycle of competition and improvement drives innovation and helps in identifying the most promising advancements in AI models.

AI Model Notables

► Google updates Chrome with 3 new AI features

1. Automatic Tab Organizer: Have too many open tabs (I do) – this will help you organize them into groups to make your life a bit easier

2. AI-Powered Writing Assistant: Tired of copy-n-pasting between your AI tool and wherever you write on the web, now Chrome brings native writing to the web

3. Custom AI-Generated Browser Themes: I am not much of a personalizer but this allows the creation of personalized themes based on mood, style, and color

► Anthropic building feature for chatbot Claude to analyze images

► Apple aims to run AI models directly on iPhones, other devices

► OpenAI now allows you to archive all of your chats - Go to settings

► Gen AI contract drafting and review assistant Spellbook raises $20m Series A Funding

► Norm AI raised $11.1 million with aim to aid compliance chiefs

► Gen AI Legal Startup CallidusAI Raises Investment Led by Andrew Ng’s AI Fund

► Thomson Reuters Announces New Gen AI Features Within Practical Law, CoCounsel Core Expansion outside US

News You Can Use:

➭ Loneliness and suicide mitigation for students using GPT3-enabled chatbots. A study of over 1000 students by Stanford University uncovered alarmingly high loneliness. Study subjects reported strong social support from the chatbot — with 3% of the students even crediting it with preventing their suicide attempts.

➭ Two US appeals courts form committees to examine AI use.

➭ Why is "Protect Taylor Swift" trending on Twitter? Viral AI outrage explored.

➭ Leaked EU AI Act is a wake-up call for organizations- The regulation's final version has sparked alarm.

➭ Most top news sites block AI bots - Right-wing media welcomes them.

➭ How US Postal Service (USPS) is pioneering AI integration in public service.

➭ 15 most advanced countries in artificial intelligence.

Who is the author, Josh Kubicki?

Some of you know me. Others do not. Here is a short intro. I am a lawyer, entrepreneur, and teacher. I have transformed legal practices and built multi-million dollar businesses. Not a theorist, I am an applied researcher and former Chief Strategy Officer, recognized by Fast Company and Bloomberg Law for my unique work. Through this newsletter, I offer you pragmatic insights into leveraging AI to inform and improve your daily life in legal services.