OpenAI points out that, like Visa, it is trying to dominate the market with law rather than technology

Journalist Taylor Lorenz points out that OpenAI is trying to establish a dominant position in the AI market by creating barriers to entry for other companies, similar to the strategy Visa has implemented in the payment industry.

OpenAI is Visa - Sherwood News

'Visa's success is not just about building a payment network, but about creating barriers to capture customers and keep competitors out,' Lorenz said. OpenAI, which develops AI, has to compete with competitors like Google, Meta, and Amazon, so OpenAI is trying to become the Visa of artificial intelligence.

The history of Visa dates back to 1958, when Bank of America mailed unsolicited credit cards to 60,000 Californians, and continued to do so for the next 12 years until mass mailing of cards was outlawed. These credit card handouts led to massive fraud and late payment problems, so Bank of America realized it needed to create a payments network with account verification and fraud detection systems. It partnered with the banks to start the network that would eventually become Visa.

'But in the 2010s, Visa faced a number of threats, with well-capitalized companies like PayPal and JPMorgan Chase poised to threaten Visa's virtual monopoly in payment processing,' Lorenz said. In addition, payment processing was beginning to become a commodity, as other developed countries began to roll out their own payment programs.

To combat this and maintain its monopoly, Visa is accused by the Department of Justice of using aggressive tactics to ensure that companies like Costco and Apple couldn't expand their payments network, and it also reportedly spent heavily lobbying for more favorable payments regulation.

The U.S. Department of Justice sues Visa for violating antitrust laws, alleging that 'Visa's anticompetitive conduct harms the nation and the economy' - GIGAZINE

'OpenAI is seeking to become the leading AI provider, engaging in exclusive contracts and lobbying to restrict competition and secure government contracts,' Lorentz said. He argued that, like Visa, it is trying to build a legal moat to establish a dominant position.

Many companies, including Google, Meta, and Amazon, have released their own foundational models, some of which are open source, such as Meta's Llama and Mistral's Mistral-7B. Lorenz pointed out that 'To counter these competitors' developments, OpenAI appears to be taking a page from Visa. In OpenAI's latest funding round, investors were asked to refrain from investing in competitors, including Anthropic and SSI. OpenAI CEO Sam Altman has urged lawmakers to regulate AI, suggesting that these efforts are an attempt to dominate the market not through superior technology, but by limiting competition through exclusive contracts, government contracts, and licensing requirements for advanced AI models.'