Over the 2020s, the rise of generative AI has redefined competition across the U.S. technology industry. Startups like OpenAI and Anthropic are taking market share from legacy players. AI-native products like Perplexity and ChatGPT are disrupting once-stable sectors, from search to software development. Even America’s leading tech companies are not immune to the pressure to reinvent themselves in the face of these competitive threats. AI has triggered a huge moment of genuine dynamism, but Washington’s approach to the tech industry is stuck in the past.
For years, critics in Congress and bureaucrats at the Federal Trade Commission and Justice Department have insisted that tech markets are static and monopolized. Their arguments were never well-supported, but today, they are simply obsolete. Complaints against “big” businesses built around snapshot analyses from five, ten or more years ago no longer hold up when the playing field is shifting by the month. AI is not only creating new products; it’s creating new companies, business models and user behaviors. Anyone reading tech news can see that Microsoft, Google, Meta, Apple and Amazon are all under huge pressure to further their own AI’s capabilities and improve the AI-integrated services they offer.
For example, search—long the crown jewel of Google’s empire—is now one of the most contested spaces in tech. Millions of users are turning to conversational AI tools instead of the traditional “list of links” search model, gaining specific and in-depth searches of content around the web. The unique skill of using unique Boolean search methods is being replaced by a more personal and interactive form of search from AI assistants that accelerate the process for you. Suddenly, a sector once labeled “incontestable” is facing an explosion of competitors with radically different approaches that consumers want to use.
The same story is playing out in productivity software, coding tools, customer service, education and entertainment. Consumers have more choice than ever, and the barriers to entry are dropping. This is what a competitive market looks like. It’s not static or tidy like bureaucrats assume. It’s dynamic, disruptive and unpredictable—precisely the kind of environment that regulation should be careful not to interfere with.
Yet, in Washington, old habits die hard. Federal antitrust cases are still lumbering along, based on theories that assumed market conditions from years ago would remain frozen in time. Lawmakers continue to cite outdated data and simplified claims about tech consolidation or integrated product features, pushing bills that seize control of an outdated model while ignoring the complex, competitive pressures reshaping the industry right now in front of our eyes.
Meanwhile, as this radical transformation is happening, federal antitrust enforcers are re-reviewing whether Meta should have been allowed to acquire Instagram 13 years ago.
The irony is stark: while policymakers lament a supposed lack of innovation, the market is doing exactly what it’s supposed to:rapidly evolving and providing new, valuable and exciting services to consumers.
If regulators truly care about competition, they should celebrate this moment. Instead, they risk distorting it by applying old rules to new realities and assuming incumbent market leaders are uncontested when, for example, ChatGPT, only released in 2022, rocketed OpenAI’s valuation to $300 billion.
The government’s antitrust strategy can’t keep pretending the AI wave doesn’t exist. Every case, every claim, every theory of harm must now contend with a key market truth; in tech, leaders can fall behind in an instant.