Rapid advancements in artificial intelligence (AI) are transforming global economies and societies, offering significant productivity benefits alongside risks such as job displacement and market concentration. The accessibility of affordable, high-performing AI models is crucial for widespread adoption (Acemoglu 2025). Following the launch of ChatGPT, concerns arose about market dominance by a few US companies; however, the introduction of Deepseek’s R1 model in 2025 demonstrated that newcomers could significantly challenge incumbents (André et al. 2025).
The AI market is now increasingly dynamic, with a surge in new entrants and innovations across sectors (Bick et al. 2024). AI model prices have dramatically declined—by 80% over the past two years—making advanced technologies more accessible. Nevertheless, future risks, such as concentrated resources and dependencies, pose challenges for long-term competition. Understanding these trends is vital for policymakers to foster a competitive AI landscape that promotes broad technological adoption and optimal productivity gains.
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