Doh-Shin Jeon discussion of: AI stack competition
Doh‐Shin Jeon · Economic Policy · 2025
Korinek and Vipra (2025) offer an insightful and timely exploration of the competition landscape for foundation models, highlighting two critical risks of market concentration – market tipping and vertical integration – while proposing remedies. I particularly appreciate their focus on the role of scale laws and the intelligence feedback loop in driving market concentration. In this discussion, I aim to complement their insights by delving deeper into two areas mentioned in their work: the data feedback loop and the interplay between competition and AI safety. The presence – or absence – of a strong data feedback loop in foundation models is a pivotal factor shaping market concentration. My thoughts here build on two recent contributions that Korinek and Vipra (2025) did not address. Hagiu and Wright (2024) argue that data feedback loops leading to market dominance are more the exception than the rule. They provide several reasons for this perspective: