Market concentration is the degree to which economic activity, resources, or market share are controlled by a small number of firms. High concentration can give those firms disproportionate influence over prices, access, innovation, and who receives economic gains. section 6.10
Generative AI illustrates how concentration develops. Building leading models requires enormous amounts of computing power, data, and specialized talent, placing important resources in the hands of a small group of companies. OpenAI, Microsoft, Anthropic, Amazon, Google, and Meta are identified as major players across infrastructure and widely deployed foundation models. section 6.10
Concentration in AI creates several competing possibilities:
- An emerging AI oligopoly could direct a disproportionate share of generative AI’s benefits toward platform owners, model developers, and investors. section 6.10
- Open-source models can let smaller companies and independent researchers build or adapt systems without relying entirely on proprietary application programming interfaces. section 6.10
- Hybrid strategies can combine open and closed tools to balance performance, cost, and privacy, although the most capable models may remain beyond most organizations’ resources. section 6.10
- The broader effects on wages, employment, inequality, and market concentration remain contested even where short-term task-level productivity gains are visible. section 6.12
