Contending for AI dominance in a shifting US regulatory landscape.
This feature story highlights opportunities and jobs-to-be done for Harvard Business School graduates, MBA students, and business leaders, as Elon Musk, Open AI, and Microsoft face off in several monopoly and antitrust lawsuits.
Current State Key Developments Shaping AI Landscape
During a second Trump administration, artificial intelligence (AI) regulatory compliance, free speech, and antitrust rule-making are poised to impact multi-billion-dollar decisions in Big Tech. In a September 25, 2024 press release, Bain & Company said the total addressable market for AI-related hardware and software will reach $990 billion by 2027.
Growing AI expansions across software development and infrastructure, healthcare, pharmaceuticals, and financial services create jobs-to-be-done for business leaders, first-year MBA students, and Harvard Business School's graduating class of 2025. With the reelection of Donald Trump and Republican control of Congress, business leaders can expect to see a deregulated tech economy.
President-elect Donald Trump's incoming administration could shift away from incumbent President Biden's AI Policy, which states, "The United States Government must foster safe, secure, and trustworthy AI development and use; manage AI risks; realize democratic values; respect human rights, civil rights, civil liberties, and privacy; and promote worldwide benefits from AI.”
Evolving Regulatory Environment And Implications
AI is now an unstoppable force poised to supersede human cognition and deliver exponential impact in society, and new fears of dominance emerge with Elon Musk's influence in the 2024 presidential elections. "A star is born," said Donald Trump, who became the 47th President-elect of the United States. Elon Musk, who co-founded Open AI with Sam Altman, (CEO of Open AI) and donated $100 million to fund Open AI, now expresses concerns over oligarchic dominance of AI by Open AI and Microsoft.
In a February 17, 2023 tweet on X (formerly Twitter), Musk said, "OpenAl was created as an open-source non-profit company to serve as a counterweight to Google, but now it has become a closed-source, maximum-profit company effectively controlled by Microsoft. Not what I intended at all."
In a California court, Elon Musk now contends with Sam Altman and Microsoft, alleging breach of contract, constructive fraud, and antitrust law violations. Elon Musk claims that Microsoft and OpenAl formed a monopoly to eliminate xAl, a Musk-owned company, and other competitors in the Al sector.
In Elon Musk’s complaint, he said “No reasonable person could conclude OpenAI is proceeding in good faith as a charity committed to safety and transparency above profit, organized for public rather than private benefit.” Musk’s amended complaint came after Thrive Capital led Open AI’s most recent funding round, valuing Open AI at $157 billion. xAI Corp's origins date back to 2012, when Elon Musk founded Neuralink, a neurotechnology focused on developing brain-machine interfaces. As of November 2024, xAI has raised $5 billion in funding, which values xAI at $50 billion. Led by VC firms, OpenAI's current valuation triples xAI Corp's.
In a March 5, 2024 statement, Open AI said, "Elon wanted us to merge with Tesla or he wanted full control. Elon left OpenAI, saying there needed to be a relevant competitor to Google/DeepMind, and that he was going to do it himself."
As Donald Trump's cabinet takes shape, Americans for Responsible Innovation (ARI), a non-profit innovation advocacy group founded by Brad Carson, former Oklahoma Democratic Congressman, and Eric Gastfriend, technology entrepreneur, launched a November 11, 2024 public petition asking Donald Trump to name Elon Musk a special adviser on AI. "There's no one better positioned to help the Trump Administration navigate this new technology," said Satya Thallam, ARI Government Affairs Senior Vice President.
For the office of the United States Attorney General, Donald Trump recently nominated Pam Bondi, who signaled willingness to take on big tech in the 2020 case of Google vs. the United States. If Pam Bondi, who has been loyal to Donald Trump, leans towards Elon Musk and away from Sam Altman's and Open AI's multi-billion-dollar partnership with Microsoft, and continues in her legacy as former Attorney General of Florida, it could trigger more divestments, mergers, and acquisitions for titans like Meta, Apple, and Amazon. If the courts and Department of Justice rule in favor of Elon Musk, then Open AI's fears of Musk seizing control of Artificial General Intelligence (AGI) and unprecedented human intelligence may come to fruition.
Highlighted Players, Influencers And Decision-Makers
Elon Musk and Vivek Ramaswamy are poised to lead the new Department of Government Efficiency (DOGE), and Musk is likely to influence AI Agenda and Policy and rulemaking during the second Trump administration.
Elon Musk has been vocal about Big Tech's AI monopolies. In a November 15, 2024 amended lawsuit, Musk said Open AI and Microsoft sought to monopolize the market for generative AI. "Never before has a corporation gone from tax-exempt charity to a $157 billion for-profit, market-paralyzing gorgon — and in just eight years," the complaint said. Reuters said the lawsuit seeks to void OpenAI's license with Microsoft and force them to divest "ill-gotten" gains.
Hannah Wong, Open AI Chief Communications, said, "Elon's third attempt in less than a year to reframe his claims is even more baseless and overreaching than the previous ones."
In a March 5, 2024 statement, Open AI said Musk suggested Open AI attach to Tesla as a cash cow. "Tesla is the only path that could even hope to hold a candle to Google. Even then, the probability of being a counterweight to Google is small. It just isn't zero," Elon Musk said in the email thread.
Business Impact: Practical Implications For Leaders
At a paradoxical crossroads of AI dominance and protecting Americans, Donald Trump's AI Agenda and Policy must choose between Elon Musk and Sam Altman, who are both multi-billionaires affiliated with Tech Titans that include Tesla, SpaceX, X, Microsoft, and Y Combinator.
In Trump orbit, Elon Musk's growing influence creates several conflicts of interest, murking the lines of governance and oligarchy. A pertinent question arises: would Elon Musk’s roaring influence impede Donald Trump's promise of deregulation to let the markets run themselves and make America great? While deregulation may lead to increased revenues and innovation, three plausible impacts are highlighted for consideration.
Regulatory Impact
Pros
Expanded opportunities to advance AI models allow for faster innovation and GTM.
Increased revenue and profitability from advanced AI models.
Reduced fines for antitrust, data privacy, and deceptive marketing violations.
Cons
Speed of innovation and AI model creation may surpass supervisory oversight to enforce human rights and ensure national security.
Ambiguous regulation and oversight could trigger abuse, exploitation, and abuse of user data.
Market Competition
Pros
Increased efficiency and scalability. Enhanced leverage for innovation in comparison to Chinese and EU AI markets.
Responsible AI value proposition. User trust and safety may become a value proposition to drive competition amongst tech players.
Enhanced insights. Enhanced intelligence to understand human behavior and develop tools that empower people and improve their daily lives.
Cons
Ambiguous 1P and 3P compliance requirements, leading to abusive or deceptive marketing standards, monopoly, and oligarchy.
Increased barriers to entry for new tech players and innovators.
Corporate Response
Pro
Increased autonomy and independence. Corporations will be positioned to lead the charge to develop and deploy responsible AI technologies.
Con
Corporate responses to deregulated AI may vary widely, depending on factors such as industry, business model, organizational culture, and profitability objectives.
Future Outlook: Emerging Trends And Opportunities
The United States' current business climate is turbo-charged with ideological differences between Republicans and Democrats. With the likelihood of regulatory overhaul and accelerating pace of AI-driven innovation, a new era unfolds. AI-enabled features and functionality will continue redefining user experiences for platform and consumer-facing products, from healthcare delivery to national security.
As President Biden's administration transitions to Trump, Tech Titans and business leaders may anticipate shifts in regulatory enforcement. There could also be more litigation and fierce competition in the quest for AI dominance. In a landmark ruling in August, 2024, in the case of the State of Colorado vs. Google, U.S. District Judge Amit Mehta of the District of Columbia ruled that Google violated U.S. antitrust laws by monopolizing “search” with its flagship product (Chrome web browser), and through general text advertising.
Judge Mehta said, "Google is a monopolist, and it has acted as one to maintain its monopoly." Judge Mehta's ruling against Google may force a sale of the company's Chrome web browser. "It also provides a roadmap to the components necessary to restore competition to these markets that have 'revolutionized how we live,'" the final judgment said. This judgment sets a precedent for antitrust penalties for Tech Titans in an AI era. The Court's final judgment said, "the promise of new technologies, including advances in AI, may present an opportunity for fresh competition. But only a comprehensive set of remedies can thaw the ecosystem and finally reverse years of anticompetitive effects."
Several amendments of the U.S. constitution form the bedrock for antitrust laws in the United States. The 1890 Sherman Act, 1914 Clayton Antitrust Act, and 1914 Federal Trade Commission are key rule books for antitrust governance and enforcement. However, "various constitutionally based interests — such as federalism, freedom to petition the government, freedom of the press, freedom of speech, and freedom of religion — at times may be in tension with the economic-based goals of the antitrust laws,” said Alden Abbott, former Federal Trade Commission's General Counsel, in a 2014 report.
Markets rose after Donald Trump defeated Kamala Harris in the 2024 Presidential election. With Amazon, Alphabet (Google), Microsoft, and Tesla stocks trading higher, Tech Titans may anticipate a friendlier regulatory environment and better stock performance. Yet Trump's campaign presents a paradox: achieving unprecedented economic growth while reducing special influence in Washington may create some skepticism for investors, and volatility for Tech stocks. Tech leaders like Elon Musk, Sam Altman, and Microsoft CEO Satya Nadella must oscillate and achieve balance between deregulation, antitrust concerns, and AI dominance.
Harvard Business School's graduating class of 2025, RCs, and incoming class may see opportunities to drive change alongside the presidential transition. In an executive order on October 30, 2023, President Biden expanded Trump's Executive Order 13859, to drive American AI leadership.
Though President Biden's Executive Order 14110 placed restraints that aim to enforce AI trust and safety and human centricity, business leaders will now face the challenge of balancing competition and deregulation. As the courts progress towards final judgments in other landmark cases that include U.S. vs. Apple Inc., U.S. vs. Facebook, and Elon Musk et.al vs. Sam Altman & Microsoft, more antitrust enforcement rulings can be anticipated, and perhaps some muscling by presidential powers.
In a September 11, 2024 interview with Shawn Ryan, when incoming Vice President J.D. Vance suggested that American support for NATO is premised on the EU refraining from restricting Donald Trump’s tweets on Elon Musk’s X social media platform, antitrust concerns may have been triggered for X. As Elon Musk's influence soars, X and Tesla's market power may create stifling competition amongst other Tech Titans, social media companies, and new market entrants.
Uncertainty looms as Tech Titans and business leaders march forward anticipating President-elect Donald Trump's inauguration on January 20th, 2025. In the event of plausible regulatory ambiguity, Tech players and business leaders may defer to lower courts to interpret antitrust laws and AI regulation. The following opportunities emerge for Harvard Business school students:
AI Policy and Strategy Advisory: To get ahead of what lies ahead, stay abreast with regulatory developments in antitrust rulings that include Google, Open AI, Apple, and Microsoft. The rulings from these cases will shape trends to develop AI policy and inform strategy consulting and strategy advisory.
Product and Platform Data Privacy Advisory: Understanding data privacy regulatory frameworks, such as GDPR, California Privacy Act, and Virginia, will enhance product sense to adapt privacy features, functionality, and policy for consumer and platform products.
Mergers and Acquisition for Big Tech: Consider preparations for a career in mergers and acquisitions (M&A) for big tech, which will include advising tech clients on strategic deals, such as acquisitions, mergers, and divestitures. M&A advisory for big tech requires a deep understanding of the tech industry and market trends.
Divestments: Understanding ways for Tech Titans to optimize their current portfolio and suite of products or services in ways that reduce regulatory risks and shed non-core assets to execute plausible divestiture deals like Google's divestiture of Chrome, or Tiktok’s U.S. business.
Venture Capital in AI – Understand ways to identify and invest in innovative and responsible AI-powered startups that can solve human problems and scale.
AI is now king and a force, one that may soon surpass the highest human cognition possible. Yet, we are architects of AI’s kingdom and collectively, we hold the power to shape this kingdom. Our pursuits of dominance, driven by ideology and wealth creation must not overshadow our commitment to humanity.
We must remain accountable to the lives of Americans, and the world we inhabit.
In the words of our founding fathers, “We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”
Ibe Imo (Journalism ’25) is a Harvard Master of Journalism candidate, storyteller, and technology professional. He is a fitness enthusiast and enjoys outdoor activities, including hiking and trail cycling.
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