Cohere CEO Cites 1975 SEC NRSRO Designation and 1985 EU Motor Vehicle Block Exemption as Precedents for AI Standards Capture

Gomez draws direct parallels between AI governance proposals and two documented regulatory experiments. In 1975 the SEC created the NRSRO category without published entry criteria, resulting in a stable three-firm oligopoly whose AAA ratings on subprime securities preceded the 2008 crisis. The 1985 EU Motor Vehicle Block Exemption granted manufacturers authority over service standards; the European Commission required 25 years of subsequent reforms to restore competition while safety metrics showed no measurable improvement attributable to the waiver.

Data from both episodes show that safety-framed entry barriers produced persistent concentration rather than elevated performance. NRSRO count remained fixed at three from 1975 to 2000. EU Commission reports on the block exemption documented reduced independent workshop entry and stable or declining price competition in after-sales services. No peer-reviewed study linked the waivers to lower failure rates in either bonds or vehicles.

Operationally, the pattern implies that AI standards bodies controlled by the same firms that train frontier models will set compute thresholds, evaluation protocols, and licensing terms that favor scale. Open-weight and smaller-model developers face de facto exclusion from certification markets, increasing the cost of independent deployment in regulated sectors such as finance and defense. Multi-stakeholder standards processes with published participation criteria and rotating membership reduce this risk.