Monopoly Profits, AI Arms Races, & the Mirage of Silicon Valley Platform-Oligopoly Disruption
Users are likely to gain massively from the buildout of MAMLMs—natural-language interfaces, very big-data very high-dimension very flexible-functional-form classification and regression analysis, and the rest. Or, rather, they will do so if ChatBots and their ilk become users’ servants rather than users’ masters.) But the idea that new Googles and Facebooks will arise from the disruption of incumbent platform-oligopoly tech megacorps seems, in my view at least, highly likely to be pure mirage…
The pace of technological change in the 21st century has been astonishing, but its locus is shifting rapidly from the consumer-facing edges of the tech sector to its very core: the infrastructure, the platforms, and the software development processes themselves. The old guard—Google, Microsoft, Apple, Amazon—built their empires on the back of 20th-century innovations: search, productivity software, e-commerce, and the personal computer. These platforms, for all their dynamism, are now showing their age. Their architectures, interfaces, and business models are deeply rooted in the needs and constraints of an earlier era—one in which humans, not machines, wrote the code and specified the queries.
And so this morning we find the very sharp Charles Ferguson writing:
Charles Ferguson: How AI Will Disrupt Big Tech <https://www.project-syndicate.org/onpoint/big-tech-firms-cannot-outrun-ai-by-charles-ferguson-2025-06>: ‘AI is advancing at an astonishing pace and undermining the core businesses of tech giants like Google, Microsoft, and Apple…. It is also reshaping… software development… [perhaps] render[ing] much of today’s tech sector obsolete…. The most obvious victim… Google[‘s]… revenues derive primarily from ads…. [But] OpenAI’s ChatGPT, Anthropic’s Claude, or Perplexity [are]… already vastly superior to the Google hunt-and-peck model…. [As for] the current industry’s [other] giants… AI may well supersede them [as well], and it is already opening space for new disruptors…. Microsoft and others are adding AI “copilots”…. But all of those products are burdened by history…. Wouldn’t you be better off using something designed from the ground up with AI in mind?… Amazon’s interface is cumbersome…. AI technology is improving stunningly fast…
Indeed, the rise of generative AI, this comfortable order is under existential threat. The new tools applications are new ways of interacting with information, of specifying tasks, of building software. The tyrannies of “hunt-and-peck” searching, spreadsheet cells, rigid and picky programming languages, and much more are all are being eroded by systems that can be instructed in natural language, that can generate not just code but prose and even analysis on demand, and that can automate workflows once thought to require armies of engineers. The implications are not just for consumers, but for the very structure of the technology sector itself.
But is Ferguson right in seeing tech-titan disruption by challengers as the likely outcome?
I think not.