So, I certainly wouldn’t expect the AI companies to capture all the value; you’re right that competition drives the profits down. But, I also don’t think it’s reasonable to expect profits to get competed down to zero. Innovations in IT are generally pretty easy to replicate, technically speaking, but tech companies operate at remarkably high margins. Even at the moment, your various LLMs are similar but are not exact substitutes for one another, which gives each some market power.
So, I certainly wouldn’t expect the AI companies to capture all the value; you’re right that competition drives the profits down. But, I also don’t think it’s reasonable to expect profits to get competed down to zero. Innovations in IT are generally pretty easy to replicate, technically speaking, but tech companies operate at remarkably high margins. Even at the moment, your various LLMs are similar but are not exact substitutes for one another, which gives each some market power.