We report the first observation of the quantum effects of competing $chi^{(2)}$ nonlinearities. We also report new classical signatures of competition, namely clamping of the second harmonic power and production of nondegenerate frequencies in the visible. Theory is presented that describes the observations as resulting from competition between various $chi^{(2)}$ upconversion and downconversion processes. We show that competition imposes hitherto unsuspected limits to both power generation and squeezing. The observed signatures are expected to be significant effects in practical systems.
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