Competitive dynamics in the AI technology stack

Generative AI is a transformative force: a general-purpose technology with the potential to reshape industries, create new markets and drive global economic growth. While many urge swift action by competition agencies, a measured approach is essential. The AI technology stack, with its distinct and layered dynamics, operates very differently from the Web 2.0 landscape that came before it. Generative AI’s rapid evolution, its unique dependencies across the stack and its potential to transform the entire sectors demand a nuanced regulatory lens. Rather than applying lessons from past digital markets, competition authorities should consider the complex interplay of innovation, scale and collaboration that define this new era. This article seeks to illuminate these dynamics, underscoring the need for careful economic analysis and the development of modern regulatory frameworks that can foster sustainable growth whilst protecting competitive dynamics. Missteps in understanding or regulating the forces that propel this technology forward could limit its benefits, stifle innovation and weaken the economic opportunity it holds. With thoughtful, well-informed frameworks, we can foster a competitive environment that maximizes AI’s reach and impact for generations to come.