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Regulators can’t keep up with the AI economy Regulators can’t keep up with the AI economy

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Regulators can’t keep up with the AI economy – Crypto News

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About the author: Brett M. Decker is a New York Times bestselling author and the Endowed Chair of Leadership at Northwood University. He is a former editor and editorial page writer for The Wall Street Journal.

ChatCPT marks the third anniversary of its public launch Sunday. Its extraordinary success stands as a potent reminder—particularly for policymakers—of how quickly innovation can reorder entire industries.

Within five days of ChatGPT’s release, one million people had signed up for it. Two months later, it had 100 million users. Today, more than 800 million people use ChatGPT.

ChatGPT has already made conventional search tools outdated. Google’s dominance is slipping. A recent HigherVisibility study found Google’s share of general information searches fell from 73% to 67% between February and August, while ChatGPT’s share tripled. Daily usage of AI tools nearly doubled during that period. The fastest usage growth was among users aged 18 to 24—a cohort unlikely to revert to older software.

ChatGPT’s almost-instantaneous ability to change the search market is at odds with the way policymakers and regulators look at markets. They typically take legal action like suing a company on antitrust grounds based on a single point in time. And their actions are predicated on assuming markets remain static while cases drag through years of litigation.

But that isn’t how business works, as ChatGPT shows us. The result is that the issues regulators identify are often out of date by the time their proposed measures have worked through the courts and Congress.

Consider the U.S. District court ruling in September that largely cleared Google of antitrust violations. The Justice Department and several state attorneys general sued Google in 2020. But since then, there has been a marked evolution in the search market. As Judge Amit Mehta pointed out in his ruling, “the emergence of GenAI changed the course of this case.”

Critics of a recent merger between Hewlett Packard Enterprise and Juniper Networks, two companies in the networking sector that help power the nation’s 5G and AI infrastructure, suffer from the same static mindset. The DOJ settled and approved the merger in June, but some lawmakers in Congress want a judge to reverse that decision. They say they are worried about the companies’ combined market share, which is just 19%.

They aren’t considering how the market may be changing. The biggest player in the networking space is Cisco. Its market share is roughly 38%; a decade ago it was 48%. That decline reflects the structural changes rapidly unfolding across the networking sector.

Networking isn’t like traditional manufacturing or energy infrastructure where market share calcifies over decades. It is a high-velocity market, driven by constant leaps in wireless standards, major advances in AI-driven network management, and entirely new layers of cloud-edge computing. What looked dominant five years ago is now obsolete.

That is why focusing on simple market-share snapshots can be misleading. By the time regulators call a moment too concentrated, the ground has already shifted. New entrants, new architectures, and new technologies routinely scramble the competitive landscape.

A cornerstone of America’s economic strength is vibrant competition among private-sector companies. Competitive firms know that they must continually innovate if they hope to continue growing. Companies that rest on their laurels and fail to adapt to the times—think Kodak or Blockbuster—don’t survive.

Regulators shouldn’t stop enforcing the law. Their enforcement just needs to match the tempo of innovation. Remedies built on backward-looking market definitions risk locking in old hierarchies rather than promoting new entries. Antitrust should preserve space for change, not freeze the marketplace in amber.

As ChatGPT marks its third anniversary, it offers a simple lesson to enforcers and courts alike: In technology markets, the most powerful check on monopoly is often the next invention. Our legal frameworks and their enforcers should be nimble enough to recognize that before the next wave hits.

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