Does AI have a competition problem? That’s what regulators are trying to figure out, and with growing urgency, as the technology advances at a stunning pace and fears mount about already-dominant digital giants entrenching their market power.

At its first developer conference earlier this month, OpenAI—whose biggest backer is Microsoft—unveiled an update to ChatGPT whose new features for its paying users, like the ability to read PDFs, threaten to wipe out small startups that built their businesses around filling a gap in ChatGPT’s functionality.