The French competition authority warns about cloud lock-in in generative AI

2024-06-28 · Publisher : Autorité de la concurrence · Domain : Cloud & DevOps

In opinion 24-A-05, the French competition authority points to barriers to computing power and to the lock-in practices of large cloud providers (cloud credits, hard migration) in generative AI.

### Background On 28 June 2024, the French competition authority (Autorité de la concurrence) issues **opinion 24-A-05** on the competitive functioning of generative AI, following an own-initiative inquiry launched on 8 February 2024. It analyses the value chain, from computing power to models, and flags risks linked to the concentration of upstream players, including cloud providers. ### Key facts - Access to sufficient computing power is deemed essential to develop foundation models; Nvidia GPUs, in short supply since 2023, command high prices. - Financial and technical lock-in practices by large cloud providers persist: generous cloud credits for AI start-ups, technical obstacles to migration. - The Authority says such practices could amount to abuses of a dominant position. - Recommendations: assess designating model-as-a-service providers as gatekeepers under the DMA, strengthen access to public supercomputers, increase transparency on minority shareholdings. - The Authority voices concern about Nvidia's dominance (CUDA software ecosystem) and its investments in specialized clouds such as CoreWeave. ### Why it matters The opinion ties cloud lock-in to AI: credits, exit costs and GPU dependence form a single competition issue. For an IT services firm or a CIO building AI projects, it is a reminder to keep portability options from the design stage. The recommendations are addressed first to the Commission and public authorities, not to companies. ### Takeaway The cloud is no longer only about hosting: access to compute and reversibility shape competition in AI.

Tags : Réglementation, Europe, Cloud, IA, Hyperscaler