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Big Tech's AI Empire: CEPR VoxEU Analysis
webCEPR VoxEU economics analysis relevant to AI safety concerns about power concentration and value lock-in; useful for understanding the political economy of Big Tech AI dominance and its governance implications.
Metadata
Importance: 45/100blog postanalysis
Summary
A CEPR VoxEU analysis examining Big Tech companies' dominance and expanding control over AI development infrastructure, markets, and ecosystems. The piece likely explores concentration of power risks, competitive dynamics, and implications for governance of AI development.
Key Points
- •Big Tech firms are consolidating control over critical AI infrastructure including compute, data, and talent pipelines
- •Market concentration in AI raises concerns about value lock-in and who shapes the trajectory of transformative AI
- •Regulatory and governance frameworks may be insufficient to address the scale of Big Tech's AI influence
- •Economic and geopolitical dimensions of AI empire-building create coordination challenges across jurisdictions
- •Concentration of AI power in few private actors poses long-term risks to democratic oversight and competition
Cited by 1 page
| Page | Type | Quality |
|---|---|---|
| AI-Induced Irreversibility | Risk | 64.0 |
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Advances in artificial intelligence (AI) are poised to transform the economy and society. From chatbots and image generators to financial forecasting tools, AI applications are becoming ubiquitous, promising to revolutionise the way we live and work. In particular, generative AI (GenAI) is being adopted at a much faster pace than other transformative technologies (Bick et al. 2024). Recent evidence already points to AI’s wide-ranging impact on labour markets and productivity, local economies, women’s employment, capital markets, public finances, and the broader financial sector (Gambacorta et al. 2024, Aldasoro et al. 2024, Albanesi et al. 2025, Andreadis et al. 2025, Frey and Llanos-Parades 2025, Kelly et al. 2025).
Behind this wave of innovation lies a less visible but significant trend: the growing role of large technology firms – commonly referred to as ‘big techs’ – across the AI supply chain. Big techs have been consistently investing in AI: in 2023, they accounted for 33% of the total capital raised by AI firms and nearly 67% of the capital raised by generative AI firms ( _Financial Times_ 2023). While big techs have undoubtedly accelerated the development of AI, their expanding influence over how AI is provided raises critical questions about competition, innovation, operational resilience, and financial stability.
In a recent paper (Gambacorta and Shreeti 2025), we explain the AI supply chain and the market structure of each of its input layers. We highlight the economic forces shaping the provision of AI today, and the role of big tech in each input market. We also outline the potential impact of the current market structure on economic outcomes and highlight challenges for regulation.
## Big techs in the AI supply chain
The AI supply chain comprises five key layers: hardware, cloud computing, training data, foundation models, and user-facing AI applications (see Figure 1). Each of these layers is essential to powering the AI systems we use today, and big techs are active in all of them.
Consider cloud computing, the backbone of AI development. AI models require immense computational resources for training and deployment, and cloud platforms provide the infrastructure to make this possible. Globally, the cloud market is dominated by three big techs: Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform.
**Figure 1** The AI supply chain
###### _Source_: Gambacorta and Shreeti (2025).
Together, the three big tech firms control nearly 75% of the infrastructure-as-a-service market, the segment most relevant for AI. Their dominanc
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