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With the market-disrupting arrival of DeepSeek, the China-based artificial intelligence (AI) upstart, it looks like one of the most cherished progressive doctrines in leftist economic theory — that United States corporate monopolists and oligarchs control the world, especially the tech world — may have to be set aside — again.

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The tech monopoly idea was given a fresh boost just two weeks ago by Joe Biden. In his last comments as U.S. president, Biden issued a warning to Americans. The U.S. government, he said, was in the process of being taken over by “oligarchs” via a “tech-industrial complex’” that could pose real dangers. “We have seen this before,” said Biden, comparing today’s rising economic influence of Big Tech executives such as Elon Musk with that enjoyed by industrialists such as John D. Rockefeller and Andrew Carnegie during the 19th century. They were the “robber barons,” said Biden.

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The robber barons, with alleged monopoly and corrupt powers, undermined competition and led to the creation of U.S. antitrust laws. Robber baron ideas have been systematically overturned by numerous economic historians, but they continue to exist in the dark bunkers of anti-capitalism and modern blog postings. Biden’s speechwriters would almost certainly have picked up the robber baron idea from such political operators as Robert Reich, the former U.S. labour secretary who posted a video in 2023 titled “From Robber Barons to Bezos: Is History Repeating Itself?”

Maybe it is, but so what? While the robber baron era was populated by good guys and bad guys, it was in fact a transformative entrepreneurial and competitive time in U.S. economic history. The Rockefellers and Carnegies propelled the American economy into world dominance. By 1910, the U.S. held global leadership in oil, steel and railroads and led the world in national growth as its entrepreneurial spirits drove individual prosperity for a century.

The idea that today’s tech barons are somehow monopolistic thugs who are out to seize economic control to the detriment of the economy, consumers and general welfare is unsupportable historically. It is also not supportable today, as demonstrated by the sudden appearance of major competitive developments in AI technology. Far from being a Big Tech monopoly, as Biden implied, AI tech looks to be a hotbed of global competition.

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News that DeepSeek had found a cheaper way to generate AI using less chip technology knocked nearly US$600 billion off the value of Nvidia, the pioneering giant U.S. chipmaker. The possible existence of such competition came as a surprise to some experts. A Politico discussion published two weeks ago warned of “The looming AI monopolies.” Another international commentator complained in December about “The AI Monopoly” and how “Big Tech Controls Data and Innovation.” The same commentator this week pulled back a bit, saying that the new competition opening up between DeepSeek and the Microsoft-linked OpenAI “represents a pivotal moment in AI development, where reasoning models redefine problem-solving and decision-making.”

The global competitive AI environment got another boost Wednesday with an announcement by China-based tech giant Alibaba that it has developed an AI model that it says surpasses DeepSeek and OpenAI versions.

One of DeepSeek’s big threats is that it may have found a way to develop AI without the need for expensive Nvidia chips. Microsoft alleges that DeepSeek’s tech prowess may be based on secret use of U.S. chip technology that is not supposed to have been exported to China. Microsoft, which owns 49 per cent of OpenAI, said it was investigating.

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True or not, the allegation against DeepSeek is really just another indicator that competition is running wild in the tech industry. That’s also the view of Sridhar Ramaswamy, the chief executive of the US$60-billion market cap Snowflake Inc., a data storage platform. “Conventional wisdom all of last year was that training amazing models was going to be possible for only a handful of companies,” Ramaswamy told Yahoo News. “What DeepSeek has done over the past few weeks is shatter that belief by saying they can train a model for $6 million.”

The arrival of DeepSeek also logically casts doubt over U.S. government attempts to launch antitrust actions against Nvidia and other AI players. Last September, the pioneering chipmaker’s market cap took a US$280-billion hit after the Biden justice department began antitrust actions against the company. But as the Cato Institute’s tech policy analyst Jennifer Huddleston observed back in September, the case against Nvidia is based on false assumptions about the state of the AI market. “Competition in AI is global,” said Huddleston.

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To look at the AI market only in terms of the United States misses much of the global nature of the current stage of development and competition, said Huddleston. “It is still unclear what the winning models, chips and applications will be.”

That was back in September. If anything, today the tech market is even more internationally competitive than previously believed. As Huddleston sees it, “DeepSeek illustrates once again that innovation is our best competition policy.”

All this is true, so long as the U.S. government doesn’t try to block DeepSeek and other competitors in order to protect U.S. firms such as Nvidia. But that would never happen, right?

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