EconWorks Podcast

EconWorks

Industrial organization insights on antitrust, digital platforms, and competition in ecosystem markets. blog.econworks.com

  1. 2d ago

    Why Is Everyone Moving Across the AI Stack?

    Why are AI companies moving across the stack? Nvidia is moving toward developer platforms through Hugging Face. AMD is moving toward model development through World Labs. Cursor is moving upstream from the application layer toward the models and computation. These moves all look like vertical integration, but the underlying economics may be entirely unique. Nvidia may be trying to expand demand for compute. AMD may be trying to become a stronger competitor. Cursor may be trying to improve the application by controlling more of the technology underneath it. This episode explores why firms integrate across the AI stack and why antitrust analysis should focus on what changes because of ownership—not simply on the fact that companies now operate at multiple levels. Read the full article and graphic analysis: https://blog.econworks.com/p/why-is-everyone-moving-across-the?r=562wri Explore more visual economics content: https://econworks.com YouTube: https://www.youtube.com/@EconWorks-d3e Substack: https://blog.econworks.com This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit blog.econworks.com/subscribe

    Why Is Everyone Moving Across the AI Stack?

  2. 3d ago

    Can AI Raise Prices Without Colluding?

    Suppose every business provides its AI with the same instruction: maximize our long-run profits, but obey the law. The AI estimates demand, studies customer behavior, learns how competitors respond, and gradually discovers that some forms of aggressive competition are not very profitable. A price cut may trigger another price cut. A promotion may trigger a competing promotion. Attempts to steal customers may provoke retaliation. Eventually, each firm’s AI may independently decide to compete less aggressively. But there is no agreement. The AIs never communicate. Nobody fixes a price. In Episode 6 of How Cartels Really Work, we look at why this problem predates artificial intelligence. U.S. cartel law has long distinguished unlawful agreements from lawful interdependence among firms that independently recognize how competitors are likely to respond. AI may not change that legal rule. What AI could change is how cheaply, quickly, and accurately firms learn to maximize profits. The result raises a provocative question: what happens if AI makes firms much better at producing less aggressive competition without ever forming a cartel? Read the full article and graphic analysis: https://blog.econworks.com/p/cartels-episode-6-what-happens-when?r=562wri Explore more visual economics content: https://econworks.com YouTube: https://www.youtube.com/@EconWorks-d3e Substack: https://blog.econworks.com This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit blog.econworks.com/subscribe

    Can AI Raise Prices Without Colluding?

  3. 4d ago

    Why Is Everyone Moving Across the AI Stack?

    In this episode of EconWorks, we look at why some of the biggest AI companies are jumping across different layers of the AI stack. Nvidia transitions from compute to developer platforms via Hugging Face. World Labs is the pivot from compute to model development for AMD. Cursor sits near the application layer and flows upstream toward models and compute. All three moves look like vertical integration at first glance. But the economic logic is different in each of these cases. Nvidia may be trying to build demand for AI compute. Maybe AMD is trying to obtain better hardware, software, and systems so it can compete better. Cursor might be trying to take more control over the models and compute underneath it to improve the application. The antitrust question isn't just whether firms are moving up and down the AI stack. But that is different when you own it. Does integration enhance output, improve products, and enhance competition? Or does it result in foreclosure, steering, higher rivals’ costs, or control over an important bottleneck? Read the full article and graphic analysis: https://blog.econworks.com/p/why-is-everyone-moving-across-the?r=562wri Explore more visual economics content: https://econworks.com YouTube: https://www.youtube.com/@EconWorks-d3e Substack: https://blog.econworks.com This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit blog.econworks.com/subscribe

    Why Is Everyone Moving Across the AI Stack?

  4. 5d ago

    What Happens When Every Firm Gets Better at Maximizing Profit?

    What if every business told an AI one simple thing: **maximize long-term profit without breaking the law**? A company today needs economists, salespeople, marketers, lawyers, finance departments, and managers. They have different information, different incentives, and often conflicting advice. AI could well embed a lot of those functions into a much more disciplined profit-maximizing system. The result raises an odd antitrust issue. An artificial intelligence can learn that aggressive price cuts tend to trigger competitive responses. It may discover that promotions, expansions of capacity, or efforts to lure away customers provoke retaliation. It may therefore be able to recommend less aggressive competition on its own. There was no secret meeting. No agreement to fix prices. No competitor communication. So where is the cartel? "In Episode 6 of How Cartels Really Work, EconWorks talks about the role of interdependence, the historic legal distinction between agreement and independent conduct, and why AI may make an old boundary in cartel law much more important. The unexpected problem could be that AI gets good at breaking antitrust law. It could be that AI gets much better at maximizing profits while obeying it. Read the full article and graphic analysis: https://blog.econworks.com/p/cartels-episode-6-what-happens-when?r=562wri Explore more visual economics content: https://econworks.com YouTube: https://www.youtube.com/@EconWorks-d3e Substack: https://blog.econworks.com This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit blog.econworks.com/subscribe

    What Happens When Every Firm Gets Better at Maximizing Profit?

  5. Oct 9

    Two Vertical AI Deals

    Nvidia is acquiring Hugging Face. AMD is buying World Labs. Both deals represent moves by chip companies further up the AI stack, but the economics could be entirely unique. Nvidia could benefit from Hugging Face increasing the number of developers, models, and apps that ultimately need AI compute. World Labs could give AMD more insight into future AI workloads and help it compete more effectively against Nvidia. So where's the antitrust injury? In this episode we talk about why vertical integration alone is not a competitive problem. The more important question is what changes because of common ownership: does the transaction increase output and increase competition, or does it create a device for foreclosure, steering, or raising rivals' costs? Read the full article and graphic analysis: https://blog.econworks.com/p/two-vertical-ai-deals-but-where-is?r=562wri Explore more visual economics content: https://econworks.com YouTube: https://www.youtube.com/@EconWorks-d3e Substack: https://blog.econworks.com This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit blog.econworks.com/subscribe

    Two Vertical AI Deals

  6. Oct 8

    Cartels, Episode 5: If Everyone Can Confess First, Why Form a Cartel?

    Leniency programs are supposed to destabilize cartels by rewarding the first participant who comes forward. But that creates an intriguing game-theory puzzle. If every cartel member knows that someone else could confess first, everyone has an incentive to move sooner. Backward induction seems to lead to an extreme prediction: confess immediately—and, therefore, never form the cartel. Reality is different. Cartels still form. This episode examines why. We distinguish cartel detection from deterrence, explain why successfully deterred cartels are largely invisible in the data, and connect leniency to the same problem explored in Episode 4: cartel members have to trust partners who have incentives to betray them. Then we introduce AI. A profit-maximizing AI could consider competing, colluding, cheating, and seeking leniency as alternative strategies. And unlike a human executive, it has no inherent loyalty to its cartel partners. Could AI make cartels more effective—or make the race to betray them even faster? Read the full article and graphic analysis: https://blog.econworks.com/p/cartels-episode-5-the-race-to-confess?r=562wri Explore more visual economics content: https://econworks.com YouTube: https://www.youtube.com/@EconWorks-d3e Substack: https://blog.econworks.com This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit blog.econworks.com/subscribe

    Cartels, Episode 5: If Everyone Can Confess First, Why Form a Cartel?

  7. Oct 7

    Two Vertical AI Deals — But Where Is the Antitrust Harm?

    In this episode of EconWorks we look at two big AI acquisitions—AMD’s deal for World Labs and Nvidia’s deal for Hugging Face. In both cases, chip firms are moving into adjacent parts of the AI stack, but they may be solving completely different economic problems. Nvidia may be buying downstream to drive demand for AI compute. More developers may mean more models, more applications, and eventually more computing demand. Maybe AMD is buying downstream for another reason: to see what future AI workloads will look like and be a stronger competitor in AI compute. The antitrust question is thus not simply whether these transactions are vertical. The key question is what changes when ownership changes. Do the deals expand output? Do they improve products? Do they increase competition? Or do they offer incentives to foreclose rivals, to raise rivals’ costs, or to control an important bottleneck? This episode uses Nvidia-Hugging Face and AMD-World Labs to show why vertical integration itself is not a theory of antitrust harm. Read the full article and graphic analysis: https://blog.econworks.com/p/two-vertical-ai-deals-but-where-is?r=562wri Explore more visual economics content: https://econworks.com YouTube: https://www.youtube.com/@EconWorks-d3e Substack: https://blog.econworks.com This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit blog.econworks.com/subscribe

    Two Vertical AI Deals — But Where Is the Antitrust Harm?

  8. Oct 6

    How Cartels Really Work, Episode 5: The Race to Confess

    A leniency program appears to generate a straightforward game theory problem for cartels. Suppose some firms agree to collude. Each wants to make cartel profits, but each knows that another cartel member may go to the government first and seek leniency. So what are you waiting for? If everyone wants to confess before everyone else, then backward induction makes the confession happen earlier and earlier. The logical prediction is surprising: the cartel should not form, in the end. But cartels do exist. In Episode 5 of How Cartels Really Work, we examine the gap between that simple prediction and reality. We investigate why deterring is so difficult to observe, why cheating and leniency both erode trust in cartels, and what happens when a profit-maximizer AI is free to choose between competing, colluding, cheating, and seeking leniency. The final question may be the most intriguing: Could an AI programmed to maximize profits be the perfect cartel partner—or the perfect cartel traitor? Read the full article and graphic analysis: https://blog.econworks.com/p/cartels-episode-5-the-race-to-confess?r=562wri Explore more visual economics content: https://econworks.com YouTube: https://www.youtube.com/@EconWorks-d3e Substack: https://blog.econworks.com This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit blog.econworks.com/subscribe

    How Cartels Really Work, Episode 5: The Race to Confess
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About

Industrial organization insights on antitrust, digital platforms, and competition in ecosystem markets. blog.econworks.com

Information

  • Creator
    EconWorks
  • Years Active
    2026
  • Episodes
    91
  • Rating
    Clean
  • Copyright
    © EconWorks Consulting Inc.
  • Show Website
    EconWorks Podcast