3 ms·

It may be brilliant, but in my book that sure sounds like it should be illegal and likely regulated as anticompetitive behavior. I expect it isn't actually ill

It may be brilliant, but in my book that sure sounds like it should be illegal and likely regulated as anticompetitive behavior. I expect it isn't actually illegal today, they pay plenty of expensive lawyers to cover their ass, but I don't think a majority of the public would want this to be legal if they understood what was being done.

bee_rider 3y ago
It certainly has a “too clever” vibe to it. But, who is it anti-competitive from or to? I wonder if there’s evidence out there that the cloud providers are selectively investing in AI companies that use their clouds. That would be a little sketchy I guess. But if Amazon, Microsoft, and Google all pump up AI companies generally with the expectation that it’ll generally benefit their sector, that seems… fine, I guess? Or at least not anti-competitive.
- _heimdall 3y ago
  It'd be anticompetitive to any newcomers in the hosting space, wouldn't it? Fly.io recently launched a GPU product. If they can't afford to front $10B to OpenAI they're locked out of the market. That also doesn't get to a potential money laundering issue. Again I assume it isn't technically illegal accounting, but Microsoft sure seems to have functionally moved money from one side of the books to the other, delaying and reducing potential taxes they would end up paying.
  - bee_rider 3y ago
    > It'd be anticompetitive to any newcomers in the hosting space, wouldn't it? > Fly.io recently launched a GPU product. If they can't afford to front $10B to OpenAI they're locked out of the market. That seems like the first scenario I described. If MS was investing in OpenAI contingent on their using MS’s cloud, then yeah it seems obviously anticompetitive, right? In this scenario, if the investment is contingent on OpenAI using MS’s cloud, that seems just blatantly anticompetitive. If it is not, I don’t see any problem. If MS selectively invests in companies that are already using their cloud services and hopes they stay by inertia… I dunno, seems grey.
    - _heimdall 3y ago
      > That seems like the first scenario I described. If MS was investing in OpenAI contingent on their using MS’s cloud, then yeah it seems obviously anticompetitive, right? My understanding is that this is precisely how it was structured, that most of the investment was effectively in MS Cloud credits. If that is inaccurate then I'm not as strong on the anticompetitive behavior being an issue.
    - chucke1992 3y ago
      OpenAI choosing Azure is not anti-competitive. You can claim it is anti-competitive because the "smaller guy" was not chosen.
      - _heimdall 3y ago
        If Microsoft's investment came with strings attached pushing OpenAI to use Azure, how is that not functionally anticompetitive behavior (even if they found some legal gymnastics to keep it technically legal)?
        chucke1992 3y ago
        But nothing stopping smaller guy to sweeten the deal no? It is the same thing why new entrants tend to offer lower prices and stuff like that. Nobody argues that new entrant to some market should offer something in order to compete with the established giant. Established giant cannot hire goons or suppress the competitor directly, like - "if you use the competitor, then you will lose access to our big store".
        _heimdall 3y ago
        So, in this example, you don't see any problem with a market leader offering billions in investment earmarked for use in buying that market leader's products? Assuming that there is some level of economies of scale with regards to cloud computing, how would a new entrant to the market compete? And is this not anticompetitive only because they used a massive pile of cash to corner the market? If so, why are mergers and acquisitions reviewed at all? With regards to the accounting of it, are you okay with Microsoft being able to use this as a way to offset billions in profits today and effectively amortize those gains over a few years as OpenAI spends the cash on Azure hosting? Forget the legal technicalities for a moment, would you as a citizen be okay with Microsoft being able to act this way? Do we want massive corporations able to block markets off as long as they can afford it, and hide away profits to avoid paying taxes?
deleted 3y ago
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bee_rider 3y ago

It certainly has a “too clever” vibe to it. But, who is it anti-competitive from or to? I wonder if there’s evidence out there that the cloud providers are selectively investing in AI companies that use their clouds. That would be a little sketchy I guess. But if Amazon, Microsoft, and Google all pump up AI companies generally with the expectation that it’ll generally benefit their sector, that seems… fine, I guess? Or at least not anti-competitive.

_heimdall 3y ago
It'd be anticompetitive to any newcomers in the hosting space, wouldn't it? Fly.io recently launched a GPU product. If they can't afford to front $10B to OpenAI they're locked out of the market. That also doesn't get to a potential money laundering issue. Again I assume it isn't technically illegal accounting, but Microsoft sure seems to have functionally moved money from one side of the books to the other, delaying and reducing potential taxes they would end up paying.
- bee_rider 3y ago
  > It'd be anticompetitive to any newcomers in the hosting space, wouldn't it? > Fly.io recently launched a GPU product. If they can't afford to front $10B to OpenAI they're locked out of the market. That seems like the first scenario I described. If MS was investing in OpenAI contingent on their using MS’s cloud, then yeah it seems obviously anticompetitive, right? In this scenario, if the investment is contingent on OpenAI using MS’s cloud, that seems just blatantly anticompetitive. If it is not, I don’t see any problem. If MS selectively invests in companies that are already using their cloud services and hopes they stay by inertia… I dunno, seems grey.
  - _heimdall 3y ago
    > That seems like the first scenario I described. If MS was investing in OpenAI contingent on their using MS’s cloud, then yeah it seems obviously anticompetitive, right? My understanding is that this is precisely how it was structured, that most of the investment was effectively in MS Cloud credits. If that is inaccurate then I'm not as strong on the anticompetitive behavior being an issue.
  - chucke1992 3y ago
    OpenAI choosing Azure is not anti-competitive. You can claim it is anti-competitive because the "smaller guy" was not chosen.
    - _heimdall 3y ago
      If Microsoft's investment came with strings attached pushing OpenAI to use Azure, how is that not functionally anticompetitive behavior (even if they found some legal gymnastics to keep it technically legal)?
      - chucke1992 3y ago
        But nothing stopping smaller guy to sweeten the deal no? It is the same thing why new entrants tend to offer lower prices and stuff like that. Nobody argues that new entrant to some market should offer something in order to compete with the established giant. Established giant cannot hire goons or suppress the competitor directly, like - "if you use the competitor, then you will lose access to our big store".
        _heimdall 3y ago
        So, in this example, you don't see any problem with a market leader offering billions in investment earmarked for use in buying that market leader's products? Assuming that there is some level of economies of scale with regards to cloud computing, how would a new entrant to the market compete? And is this not anticompetitive only because they used a massive pile of cash to corner the market? If so, why are mergers and acquisitions reviewed at all? With regards to the accounting of it, are you okay with Microsoft being able to use this as a way to offset billions in profits today and effectively amortize those gains over a few years as OpenAI spends the cash on Azure hosting? Forget the legal technicalities for a moment, would you as a citizen be okay with Microsoft being able to act this way? Do we want massive corporations able to block markets off as long as they can afford it, and hide away profits to avoid paying taxes?

deleted 3y ago

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