The AI Supply Chain: An Emerging Oligopoly?

Prithvi Iyer is Program Manager at Tech Policy Press. FTC Commissioner Alvaro Bedoya at an Open Markets conference at the JW Marriott in Washington, DC Wednesday, November 15, 2023. (© 2023 Michael Connor / Connor Studios) This weekend’s news that Microsoft may have effectively “acquired” Open AI, as two of the startup’s key executives joined the company following a board coup that ousted Open AI CEO Sam Altman, brought the high stakes Silicon Valley battle for dominance in artificial intelligence to the top of news feeds. Microsoft CEO Satya Nadella had already bound Open AI to Microsoft’s enterprise computing infrastructure, making the $80 billion startup in many ways dependent on the nearly $3 trillion behemoth founded by Bill Gates and Paul Allen in 1975. To many observers, Nadella’s move to take advantage of Open AI’s crisis appears to be a master stroke. No matter how things ultimately turn out, this saga underscores the degree to which AI is dominated by big tech firms with massive resources, both computational and financial. The scale of firms such as Microsoft, Google, Amazon, and Meta puts them in a strategic position that allows them to set the rules of the game.  This reality is explored in a new report from the Open Markets Institute and the Center for Journalism and Liberty at Open Markets that “shows how just a handful of Big Tech companies – by exploiting existing monopoly power and aggressively co-opting other actors – have already positioned themselves to control the future…The AI Supply Chain: An Emerging Oligopoly?