AI's tightly held loop

"The model introduces complexity. When investment and procurement overlap, it becomes harder to tell how much of the growth is organic and how much is sustained by the financial structure itself.

"If one company in the chain slows down, the impact doesn’t stay isolated. It moves through the network, affecting suppliers, customers, and partners in ways that are difficult to contain. 

"This type of interdependence also raises questions about access. 

"As the major players build around each other, it becomes more difficult for outsiders to enter the closed-knit network. 

"Compute, chips, and cloud capacity may become less available to those who aren’t part of the inner loop

"The industry could drift away from open competition and toward selective participation."
  1. ["Horizontal keiretsu peaked around 1988, when over half of the value in the Japanese stock market consisted of cross-shareholdings. Since then, banks have gradually reduced their cross-shareholdings…"]
  2. ["An open oligopoly market structure occurs where barriers to entry do not exist, and firms can freely enter the oligopolistic market. In contrast, a closed oligopoly is where there are prominent barriers to market entry which preclude other firms from easily entering the market…"]



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