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Two Vertical AI Deals
Description
Nvidia is acquiring Hugging Face. AMD is buying World Labs. Both deals represent moves by chip companies further up the AI stack, but the economics could be entirely unique. Nvidia could benefit from Hugging Face increasing the number of developers, models, and apps that ultimately need AI compute. World Labs could give AMD more insight into future AI workloads and help it compete more effectively against Nvidia. So where's the antitrust injury?
In this episode we talk about why vertical integration alone is not a competitive problem. The more important question is what changes because of common ownership: does the transaction increase output and increase competition, or does it create a device for foreclosure, steering, or raising rivals' costs?
Read the full article and graphic analysis: https://blog.econworks.com/p/two-vertical-ai-deals-but-where-is?r=562wri
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