AI Superpowers: China, Silicon Valley, and the New World Order

by Kai-Fu Lee

AI will bring that same monopolistic tendency to dozens of industries, eroding the competitive mechanisms of markets in the process. We could see the rapid emergence of a new corporate oligarchy, a class of AI-powered industry champions whose data edge over the competition feeds on itself until they are entirely untouchable. American antitrust laws are often difficult to enforce in this situation, because of the requirement in U.S. law that plaintiffs prove the monopoly is actually harming consumers. AI monopolists, by contrast, would likely be delivering better and better services at cheaper prices to consumers, a move made possible by the incredible productivity and efficiency gains of the technology. But while these AI monopolies drive down prices, they will also drive up inequality. Corporate profits will explode, showering wealth on the elite executives and engineers lucky enough to get in on the action. Just imagine: How profitable would Uber be if it had no drivers? Or Apple if it didn’t need factory workers to make iPhones? Or Walmart if it paid no cashiers, warehouse employees, and truck drivers? Driving income inequality will be the emergence of an increasingly bifurcated labor market. The jobs that do remain will tend to be either lucrative work for top performers or low-paying jobs in tough industries. The risk of replacement cited in the earlier figures reflects this.