The Department of Justice is suing Visa

60% of debit transactions in the US run on the company’s network

9/25/24 10:24AM

Yesterday, the Department of Justice announced that it’s suing Visa for monopolizing the debit payment market, alleging that the company paid competitors like PayPal to stay out of its way and entered into various agreements with merchants that meant they could face penalties for using alternative providers.

Debit dominance

On the face of it, Visa looks a lot like a monopoly. The company’s ~60% share of all US debit card transactions helps it rack up more than $7 billion in processing fees, according to the DOJ, with Attorney General Merrick Garland observing: “Visa’s unlawful conduct affects not just the price of one thing – but the price of nearly everything”. It’s not just in America either, as debit payments have become an increasingly important part of Visa’s global business too.

In 2009, Visa processed $2.68 trillion in payments, with around a third coming from debit transactions, while credit cards accounted for almost 55%.

Fast forward almost 15 years, and about $86 trillion worth of Visa transactions later, the bulk now comes from debit cards, which accounted for 45% (a whopping $5.5 trillion) of all Visa payments.

The new lawsuit marks the first major antitrust case in the financial services industry under Biden, though the administration has been looking into Visa’s debit market practices since 2021. Given its staggering market share, as well as the company’s rising processing fees, which have drawn the attention of other regulators around the world, many may feel that the DOJ’s action could have come a little sooner.

Millie Giles

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Demis Hassabis, Google DeepMind’s CEO and founder, was also an early Anthropic investor

A chess prodigy and an actual a knight of the realm in the UK, it’s perhaps no surprise that Demis Hassabis has made some strategic moves about his exposure to AI upside. According to people familiar with the matter, the influential AI architect became an angel investor in Anthropic, currently behind many of the leading AI models, per Arena AI leaderboards.

The Nobel Prize winner’s position in the Claude creator was previously undisclosed and, per the Financial Times, highlights Hassabis’ “growing influence across the AI industry.”

Google, which bought DeepMind, the company that Hassabis cofounded and heads to this day, for a reported ~$400 million in 2014, is also a key Anthropic investor. The tech giant reportedly plans to invest up to $40 billion in the AI company as part of the mutually beneficial relationship the pair have forged, with reports that Anthropic has committed to spending $200 billion in the other direction on Google’s cloud services over the next five years.

I’m playing all sides, so I always come out on top

In addition to his financial support for Anthropic, Hassabis has also invested in a range of AI startups launched by colleagues, such as Inflection AI, a company set up by DeepMind cofounder Mustafa Suleyman (who is now CEO of Microsoft AI), as well as efforts from other collaborators, like David Silver’s Ineffable Intelligence.

Hassabis also emerged as a recurring figure on the fringes of the recent Elon Musk v. Sam Altman trial, cropping up repeatedly in testimonies and court documents and appearing to live, as The Verge put it, “rent-free” in Musk’s head.

Founded in 2021, Anthropic has recently raised funding at a reported $900 billion valuation, sending it soaring ahead of competitor OpenAI.

Google DeepMind’s Demis Hassabis emerges as early Anthropic investor

The Nobel Prize winner’s position in the Claude creator was previously undisclosed and, per the Financial Times, highlights Hassabis’ “growing influence across the AI industry.”

I’m playing all sides, so I always come out on top

Founded in 2021, Anthropic has recently raised funding at a reported $900 billion valuation, sending it soaring ahead of competitor OpenAI.

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Musk had alleged that OpenAI abandoned its founding mission as a nonprofit dedicated to developing AI for humanity and instead became a profit-driven company closely tied to Microsoft.

The verdict caps off a three-week blockbuster tech trial that could have seen Altman and Brockman removed from OpenAI leadership.

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