Elon Musk, Bill Gates to Jensen Huang, AI Billionaires Club Looks Like a New Gilded Age

After several decades of transformative tech wealth, the AI boom is ushering in another. Not only has Nvidia Corp.’s soaring valuation made co-founder Jensen Huang an extremely wealthy man, but his distant cousin Lisa Su, head of Advanced Micro Devices Inc., is now worth $1.2 billion. A glance at the top 10 richest people in the world shows tech leaders, from Elon Musk to Bill Gates, are still on top.

A positive way of thinking about this wealth spurt is that capital is flooding into an innovative field that could eventually lift a lot of boats. If the AI optimists are right and we’re on the cusp of a new industrial revolution — or “tipping point,” as Huang put it, after Nvidia’s results smashed forecasts — productivity gains and economic growth will be felt beyond the billionaires’ club. The original 18th-century version brought us the likes of inventor Richard Arkwright, whose water-powered cotton spinning machine helped birth the modern world while making him rich. We don’t want to repeat the lost jobs and terrible working conditions that industrialization wrought, but there are ways to manage the disruption.

The less positive view is that this is looking increasingly like the Gilded Age of all-conquering monopolies like John D. Rockefeller’s Standard Oil. Today’s Arkwrights aren’t hobby inventors in their garage; they’re working alongside or inside Big Tech companies like Alphabet Inc. or Microsoft Corp., which are already dominant, with market shares comparable to the General Electrics and DuPonts of a century ago. The soaring net worth of tech bosses is going hand in hand with rising barriers to entry for new competitors, whether it’s the cost of access to the AI models themselves or the chips that power them (such as Nvidia’s), which have doubled in price since 2020, as my colleague Parmy Olson notes.

As the 20th century also showed, excessive market power can lead to collusion and corruption that keeps rivals out, workers down and regulators toothless — the opposite of what we’d want to see in the 21st. Even if you believe the potential for AI could be an IT-revolution-style doubling of economic growth rates over a decade — which in a country like France means adding €500 billion ($540 billion) in gross domestic product through 2034, according to economist Philippe Aghion — the reality could be less impressive and more socially volatile if startups are blocked or deterred from coming to market by big incumbents.

Hence why it’s essential that antitrust authorities keep a close eye on the current AI revolution — especially in Europe, where for the first time in a while there are new contenders in tech emerging. At a recent debate I attended at the European Parliament, Margrethe Vestager, the EU’s top antitrust cop, warned a panel that the current gold rush of AI funding was feeding big companies sitting atop a “nest of existing ecosystems” rather than promising startups.

Her warning might seem premature to some — after all, hype-driven AI valuations aren’t necessarily here to stay, and investors wrongly assumed during the dotcom boom that the Internet would make telecom operators like Vodafone Group Plc forever dominant (it didn’t). Bigness on its own isn’t always an abuse of dominance, either: There are positive spillover effects from large and successful companies that play fair, arising from economies of scale and scope, says digital competition expert Christophe Carugati. And antitrust regulators are far more proactive than they used to be: Amazon.com Inc. recently shelved plans to buy Roomba-maker iRobot over competition concerns, while the EU is already starting to examine Nvidia’s dominant role in supplying AI chips.

But more needs to be done to keep our guard up. Scrutinizing bottlenecks such as access to all-important training data, for example, might reveal an unfair competitive advantage for incumbents: Microsoft potentially has access to a huge amount of data via its operating systems, computing infrastructure and GitHub code repository. That’s one reason its $10 billion investment in OpenAI, while not technically a merger, deserves a closer look — NGO Article 19 recently recommended EU regulators look beyond “carefully lawyered contractual terms” and see how the partnership really works in practice. 

The threat of punishing anti-competitive behavior also needs to get creative. European regulators have fined Big Tech companies billions over the years, but that ironically may have entrenched their dominance — the biggest firms can afford to pay in a heartbeat, while smaller rivals can’t. New regulations like the AI Act or the Digital Markets Act should be accompanied with punishments that go beyond fines, such as the risk of a breakup or forced sharing of data with rivals. The latter would be similar in spirit to the 1956 consent decree that forced AT&T/Bell to license its patents royalty-free, or to the concerted 18th-century  legal challenge against Arkwright that saw his patents overturned.

Entrepreneurs should feel free to get rich off their ideas, but regulators must also enforce a level playing field. If that means giving them more resources, so be it: As Tobias Haar, general counsel at Aleph Alpha, recently suggested in Brussels, perhaps we should rename antitrust regulation “democracy protection” to underline its importance. That might make society a little more relaxed when the next AI billionaire emerges.

Also read other top stories today:

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