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1. Mapping the Cloud: Big Tech Taking the Sky by Storm

Author:
Cecilia Rikap
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
City Political Economy Research Centre (CITYPERC), University of London
Abstract:
Here I map Big Tech clouds focusing on the making of asymmetric relations with the different type of involved organizations. Amazon, Microsoft, Google and Alibaba are cloud hegemons that control every inch of their clouds. The cloud is the main means of adoption of digital technologies. As such, developers and other firms offering their services on Big Tech clouds accept the rules of a game predefined by those few giants. They even need to get enabling credentials offered by another type of subordinate actor: the companies offering trainings to get mandatory certificates for joining the cloud as providers. At the other end, customers transition to the cloud often guided and hiring the services of outsourced sales forces. After presenting all these actors and their interplay, I focus on AI as a service to explain the negative effects of such a migration at the level of organizational learning and innovation. Customers’ technological subordination and reduced learning by doing, using and interacting in the cloud has triggered mitigation strategies but only large players can afford them.
Topic:
Science and Technology, Big Tech, Corporations, Cloud Computing, and Digital Learning
Political Geography:
Global Focus

2. The competitive relationship between cloud computing and generative AI

Author:
Christophe Carugati
Publication Date:
12-2023
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
Cloud computing providers and generative artificial intelligence (GenAI) providers nurture a close, interdependent relationship: GenAI providers need cloud providers to train, run and deploy their GenAI solutions, while cloud providers see GenAI providers as a business driver to grow their market shares in cloud and related markets, such as productivity software or search engines. The cloud/GenAI relationship takes various forms, including exclusive and strategic partnerships, especially between large cloud providers and GenAI providers across all parts of the cloud market, including infrastructure, platforms and software. Competition benefits and risks are likely to result from the relationships. Competition benefits arise from increased competition and innovation in the cloud and GenAI sectors. Risks relate to potential concentrations arising from the partnerships between cloud and GenAI providers, and from anticompetitive practices, including discrimination in the supply of IT equipment by dominant IT providers, interoperability obstacles to switching, use of business-user data, self-preferencing of cloud services over third parties, tying and pure bundling. Merger control and antitrust laws can address some of the competition risks, while laws, including the European Union’s Digital Markets Act and Data Act, can deal with competition issues in digital markets and the cloud sector. Nevertheless there are gaps. The European Commission should amend existing EU instruments, including by changing the definition of a concentration under merger control, and should specify interoperability requirements for cloud providers under the Data Act. The Commission should also closely monitor developments in and outside Europe through market investigations, including with international counterparts, and should intervene to tackle imminent competition risks using fast procedural tools, such as interim measures.
Topic:
European Union, Antitrust Law, Artificial Intelligence, Cloud Computing, and Competition
Political Geography:
Europe and Global Focus