No, Anthropic Won’t Be the Only Company Left | Forward Future<br>Originals archive/Original<br>lightdark

Again and again, general-purpose technologies have performed the same three-act magic trick on the economy: the pledge, the turn, and the prestige. From steam and electricity to the combustion engine and the railroads, the pattern is eerily similar.

It all starts with an early display of breakthrough capabilities. Enthusiasm is high, and hype follows as everyone rushes to extrapolate from the initial applications to a future in which the technology and its first movers will dominate everything. Next, greed sends massive amounts of capital flooding into infrastructure and capacity to conquer the market. Winners are prematurely declared and celebrated as inevitable.

On the coattails of the initial momentum, the entrepreneurs at the helm become arrogant, and investors stop checking assumptions and fundamentals: “This time is different.”

But there is usually a turn, as a crash, a shakeout, or delayed productivity gains bring valuations and expectations back down to earth. Many investors, hurt and bruised by the end of the euphoria, then retreat from the technology completely.

Once the tourists have moved on, the stage is set for the actual prestige: the same irrational buildout that drove early winners into bankruptcy has also left behind the abundant infrastructure needed for the architectural transformation to finally take place. The technology delivers on every promise, but most of the value accrues to the organizations that quietly owned or built the scarce complementary assets that were actually needed to scale it.

The Inevitable Hubris of First Movers

AI is somewhere between the “pledge” and the “turn” phase. Overconfidence is at an all-time high. The pitch from the labs, roughly: our models may be conscious; our lab is the only one that can be trusted with such powerful technology; please regulate us, or terrible, terrible things will happen; we may one day be powerful enough to become the only private company left in the world. Gavin Baker attributed that last claim to Dario Amodei on All-In. Anthropic researcher Sholto Douglas flatly denied it, but Amodei did not directly address it in his response.

Regardless of whether Amodei believes Anthropic could end up controlling most of the economy, his hubris mirrors that of the entrepreneurs who meaningfully shaped general-purpose technologies before him, many of whom mistakenly confused early control over a new technology’s instantiation with the ability to shape its trajectory and capture the value it creates.

Take steam. Boulton & Watt tightly controlled their design under a patent monopoly for decades. But enormous value traveled downstream. In cotton production, yarn prices collapsed and cotton goods accounted for roughly half the value of British domestic exports by 1830. Or electricity, which was so successful that it became a regulated utility, undifferentiated and metered by the kilowatt-hour. Factories captured the upside as electric motors’ share of U.S. factory drive went from under 5% in 1899 to almost 80% in three decades. Over roughly the same period, manufacturing labor productivity growth jumped from 1.5% a year to 5.1%.

The combustion engine? Similar story. More than 700 firms entered the automaking race in the United States, but the industry contracted to the Big Three and a few independents by 1941. The value migrated to its complements: gasoline went from a near-worthless byproduct to 44% of the crude processed by U.S. refineries in 1931, while each additional highway passing through a city reduced that city’s population by an estimated 18%, benefiting the suburbs.

Railways? The similarity is almost too perfect. In 1876, Tom Scott led what was one of America’s most powerful corporations and the world’s largest freight carrier: the Pennsylvania Railroad. The press compared him to Napoleon, and he acted as though owning the rails meant owning the market. But Standard Oil accounted for the majority of the Pennsylvania’s oil traffic.

Tensions began when the Pennsylvania’s affiliated carrier, Empire Transportation, expanded into refining. Rockefeller demanded that Empire withdraw from the new business, but Scott refused, pushing Rockefeller to move his freight to rival railroads. The Pennsylvania countered with a ruinous price war in a desperate effort to attract other shippers to its lines. In the words of one of Scott’s lieutenants: “We paid them large rebates. … In some cases we paid out in rebates more than the whole freight.” Then the Great Railroad Strike of 1877 depleted the Pennsylvania’s treasury, and Empire’s assets were sold to Standard Oil. Within months, Standard was collecting 20 cents a barrel from the Pennsylvania even on crude the railroad carried for Standard Oil’s rivals.

But the Pennsylvania’s story was not unique. After years of overbuilding, financial leverage, and price wars, the Panic of 1893 pushed more than...