Algorithmic Status Inequality Through a Dynamic Capabilities Lens: A Market‐Based Perspective

Abstract The Point by Wu advances a compelling framework for understanding algorithmic status inequality, demonstrating how computational beliefs and computational inequalities can interact to produce persistent status hierarchies within and across organizations. This Counterpoint accepts Wu's core observations while offering a complementary theoretical lens grounded in the dynamic capabilities framework and the economics of general‐purpose technologies. Where Wu emphasizes structural constraints that render algorithmic hierarchies resistant to isolated interventions, this Counterpoint highlights organizational agency, specifically, the sensing, seizing, and transforming capabilities through which firms can detect, respond to, and potentially reshape algorithmic status dynamics. Rather than disputing Wu's diagnosis, this Counterpoint extends it by examining three complementary mechanisms: sensing capabilities (detecting status‐stratifying algorithmic effects), seizing capabilities (mobilizing resources toward more inclusive algorithmic development), and transforming capabilities (reconfiguring human‐algorithm relationships over time). These mechanisms work alongside the structural interventions Wu advocates rather than substituting for them. The dialogue between structural determinism and organizational agency in the context of algorithmic status inequality suggests a research agenda focused on the conditions under which dynamic capabilities are likely sufficient to overcome status‐stratifying structural forces, how institutions might democratize adaptive capabilities, and what governance arrangements best combine structural intervention with capability development.