Cheap Goods for Everyone? The Impact of Market Power in Artificial Intelligence on Welfare and Inequality

A common fear is that transformative AI might concentrate power among a few companies and individuals. Despite its promise, TAI might then leave ordinary people worse off. In this essay, Susan Athey and Fiona Scott Morton explore this problem, noting that while TAI could deliver productivity gains to consumers through lower prices or better products, such outcomes aren’t guaranteed. They propose policy measures, focused on protecting market competition, to ensure TAI’s benefits are broadly shared.