Former FTC General Counsel Alden Abbott recently warned in Forbes that excessive antitrust intervention could derail America’s AI leadership. Although U.S. companies are investing at record levels of investment and competing vigorously across the AI value chain, regulators are signaling a more interventionist approach that could inadvertently chill private investment, deter responsible partnerships and slow the pace of innovation. Abbott argues that policymakers should preserve the market-driven principles outlined in America’s AI Action Plan and light-touch regulatory framework that have fueled U.S. leadership in technology.

AI is Growing Quickly Because of Competition

The American AI sector is expanding at a remarkable pace, fueled by private investment and robust competition from chip manufacturers to cloud services. This healthy rivalry is driving innovation, supporting high quality jobs, and reinforcing the United States’ position as a trusted global leader in AI development. 

— Abbott emphasized that with a record number of investments from leading technology companies, the AI market remains dynamic and open. “Other AI firms have obtained major third-party investments as well – no single firm is becoming dominant in the AI sector.” This is echoed by data from sources such as Stanford’s Artificial Intelligence Report 2024, which shows robust competition and continued market entry across AI infrastructure, model development and applications. 

Abbott pointed to a CCIA article showing that competition runs through every layer of the “AI stack,” from hardware and foundational models to cloud services and end-user applications.

— He explained that “[t]he AI sector is very competitive, characterized by intense rivalry across multiple layers, from hardware to applications. While tech giants dominate, the market features a rich ecosystem of challengers, including startups and open-source projects. […] Far from threatening competition, AI alliances promote enhanced dynamic competition,” Abbot added.

Heavy-Handed Antitrust Enforcement Will Hamper Innovation

Despite clear competition, regulators are increasingly scrutinizing AI partnerships and collaborations that have, to date, driven technological breakthroughs and expanded market opportunities. Abbott cautioned that these interventions could create uncertainty for businesses, slow innovation cycles, and ultimately disadvantage the U.S. in global AI competition.

— Quoting a paper by University of Southern California Law Professor Jonathan Barnett, Abbot said that “the focus of antitrust agencies on AI arrangements ‘reflects the ascendance of a preemptive approach toward antitrust enforcement in digital markets,’ which favors early intervention in the fear that those markets are likely to ‘tip’ in an anticompetitive direction.”

Furthermore, in an uncertain legal and regulatory environment, unpredictable or overly broad enforcement can chill investment.

— Abbot raised that “[t]he threat of imminent litigation that interferes in business planning also may be expected to disincentivize AI innovation, to the great detriment of the American and global economies. The many alliances that are driving AI innovation forward could wither.”

Indeed policymakers and industry experts alike have emphasized that responsible partnerships often accelerate – not restrict – market entry for smaller firms.

The Roadmap for Regulators

Abbott concluded that the best way to sustain American leadership in AI is through a careful, evidence-based approach. Regulators should monitor the sector, but action should only be taken when there is clear proof of harm.

— Shunning an interventionist approach would still allow for regulation when needed. “It would involve monitoring of the AI ecosystem to spot any new practices that could seriously inhibit or otherwise distort competition […]. It would require compelling evidence of likely or actual competitive harm before acting.”

This balanced framework provides the most reliable path to a thriving U.S. AI sector. By focusing on clear evidence, regulators can ensure America drives competition and protects consumer choice. A pragmatic, partnership-driven approach will help the U.S. continue leading the global AI economy – strengthening innovation, supporting small businesses, and ensuring that AI delivers benefits broadly across society.