COMPETITION IN AI INFRASTRUCTURE
Competition Committee 4 December 2025
Greg Jackson
Competition Expert
Competition Division
• Introduction
• Overview of the AI infrastructure supply chain
• Common market features
• Potential tools and responses
• Conclusion
• AI now viewed as next general-purpose technology
• Over 1bn people now regularly use standalone AI Platforms
• All this is built on complex supply chain of markets which is receiving enormous amounts of investments (trillions of $s)
• AI infrastructure
• Cloud
• Datacentres
• Chips Introduction
• Energy/Networking
Common market features in AI infrastructure
Excess demand
High levels of innovation
Implications for competition?
Increasing levels of state intervention
Increasing integration and agreements
High Concentration and barriers to entry
High innovation and dynamic markets
• Vast R&D Spending
• Short lifecycles and exponential improvements
• High levels of intellectual property
“mechanics and sensors so exact… they could be used to aim a laser to hit a golf ball as far away as the moon”
Chip War, Chris Millar
High concentration & barriers to entry
Many layers of supply chain highly concentrated
Often very high entry barriers
High capital demands
Economies of scale
Long lead times
Global share for largest provider reported as over 80% of market Global share of largest 3 players reported as over 60% of market
Sources: Authority market studies and news reports
Note: The OECD has not done a market definition exercise, and these shares may not therefore relate to economic markets but are commonly understood to be key parts of the AI supply chain.
Increasing agreements and integration
• Key players expanding into other related markets both organically and via mergers
• Long term partnership agreements
• Minority shareholdings
Source: Anonymised circular AI deal visualisation, Barron’s October 2025
Excess demand
• Huge anticipated demand
• Constrained supply
• Possible bottlenecks of key components
• How will competition dynamics change if market moves to oversupply?
Recent example of price surges over 100% in DRAM markets due to shortages
Increasing state intervention
• Long history of state intervention in semiconductor industry
• Level of interventions have increased significantly as AI infrastructure has become a key geopolitical issue
Traditional competition responses
Merger Control
Conglomerate
Vertical
Killer acquisitions
Antitrust Enforcement
Abuse of dominance / Monopolisation
Collusion
Other policy tools
• Market studies and research
– Upskill and monitor
– Find potential issues
• Cooperation
– Global markets create opportunity for increased cooperation
• Advocacy
– Potential pro-competitive interventions
– Guidance and early warning letters
Conclusion
• Hugely important sector
• Complicated and varied markets but with some common features with implications for competition
• Challenge of policy response in such dynamic markets
Thank you
