Pacing the Frontier: Some Antitrust Considerations

Dario Amodei, CEO of Anthropic, has called for the AI industry to “pace the frontier”, essentially, to moderate the speed at which increasingly capable AI systems are developed so that safety measures can keep pace with technological progress. Other leading figures in the AI industry have expressed support for the idea. The precise nature and scope of any future agreement or coordination between AI companies remain uncertain. 

However, if competing AI companies were to agree to limit or slow the development, deployment, or release of increasingly capable AI systems, such arrangements would raise significant competition-law concerns.

We discuss some of the primary legal considerations below.

1. Output Restriction

Output restriction is a well-established competition-law concern. Agreements between competitors to limit or control production, supply, or output restrict competition by eliminating the competitive pressure that would otherwise force firms to bring their best offerings to market. In Nigeria, agreements to limit or control the production of goods or services, or to restrict technical development and investment, are expressly prohibited under Section 59 of the Federal Competition and Consumer Protection Act (FCCPA).

In the AI industry, the output of an AI company may not simply be the number of subscriptions sold or API calls processed and may include the continuous development and deployment of increasingly capable models, compute allocation, the discovery of new technological capabilities, and the speed at which those capabilities are commercialised. Accordingly, a horizontal agreement between competing AI companies to limit training scale or delay the release of frontier models could amount to an unlawful agreement to restrict output or, more broadly, to suppress technological competition.

2. Competition is Not Limited to Price

Competition law is not concerned only with price-fixing cartels. In technology-driven markets, consumer harm does not always present as higher prices and frequently manifests as diminished quality, delayed features, and artificially suppressed capabilities. Competition occurs just as fiercely through non-price factors such as quality, innovation, research, and technological development. This is particularly critical in the AI sector, where the ability to develop and deploy higher-performing models is itself the primary dimension of competition.

The antitrust risk of joint technological restraint is illustrated by United States v. Automobile Manufacturers Association, where the U.S. government challenged an alleged agreement among major auto manufacturers to delay the development and adoption of pollution-control technology. The case underscores a vital principle, which is that horizontal competition concerns arise whenever competitors coordinate to slow technological progress, even in the complete absence of price coordination.

The same principle may apply directly to frontier AI. Thus, if competing AI developers agree to collectively delay training, benchmark achievement, or public release of advanced models, the antitrust exposure extends far beyond conventional output limits such arrangements risk acting as innovation cartels that carry the purpose or effect of restricting competition.

3. Does AI Safety Provide a Legal Defence?

The primary commercial justification for coordination is that unchecked competition in frontier AI creates systemic risks that single market players cannot manage alone. A developer may argue that it cannot unilaterally pause development without surrendering its market position to accelerating rivals. Collective action is thus framed as a necessary measure to prevent a dangerous "race to the bottom."

However, good faith intentions may not constitute a self-executing antitrust defence. The fact that market participants genuinely believe an agreement serves the public interest does not automatically remove horizontal restraints from the scope of competition law. Typically, courts and competition authorities strictly scrutinize horizontal restraints regardless of their social utility.

To survive regulatory scrutiny, parties must establish a recognized legal exemption, such as seeking formal statutory authorization from the FCCPC under Section 60 of the FCCPA by meeting a strict proportionality and necessity test demonstrating that the restraint yields objective efficiencies or public benefits that outweigh the restriction of competition.

Key Takeaways

The debate over “pacing the frontier” presents a novel challenge for competition law. While the policy arguments for AI safety cooperation are compelling, the line between legitimate safety collaboration and unlawful horizontal coordination remains thin. For AI developers, navigating the frontier will require ensuring that joint safety initiatives do not cross into the suppression of technological progress.

This publication is provided Balogun Harold for general informational purposes only and does not constitute legal advice. Specific circumstances may require tailored legal analysis. For consultation requests, please reach out to your usual Balogun Harold contact or via support@balogunharold.com