The Corner Newsletter: Google’s Proprietary AI Chips and a Playbook for Stopping Private Equity (February 24th, 2026)
Welcome to The Corner. In this issue, we explore how Google’s proprietary AI chips will do little to dent Nvidia’s monopoly over the industry. We also released a new playbook to help state policymakers stop the encroachment of private equity into child care.
Google, Amazon, and Microsoft Use Proprietary AI Chips to Strengthen Cloud Monopolies
Jack FitzGerald
In a concentrated market for AI chips where Nvidia controls some 85% of the market, registers gross margins of 73.4%, and has a market cap approaching $5 trillion, any emerging competition should be welcome news. Google’s AI chip design, the Tensor Processing Unit (TPU), first deployed in 2015, could present such a challenge. Already, these TPUs are used to train Google’s AI model Gemini, which has amassed 750 million users. And yet, despite Google’s success in challenging Nvidia’s dominance, AI startups and would-be competitors see no promise of real competitive relief any time soon.
Google’s TPUs are available, but not to buy. Customers such as rival AI companies can rent them by signing up for computing and storage services provided by Google Cloud. But taking this path poses many of the same types of competitive risks, including getting locked to long-term reliance on Google’s TPU chips. All AI software must be tailored to the specific chip it runs on, which would make it extremely costly for any customer that codes for Google-designed chips to then switch hardware. This gives Google immense leverage, as any AI company that comes to rely on TPUs can only get them from Google.
Google is not alone in deploying proprietary chips that deepen customers’ reliance on their services. Microsoft has also announced plans to rely largely on an in-house designed AI chip, Maia, in its data centers going forward. Similarly, in 2020 Amazon unveiled an AI chip, Trainium, for use on its cloud platform, AWS. This includes Project Rainier, an $11 billion data center in Indiana that is the largest non-Nvidia cluster in the world.
These three corporations, which represent two thirds of the cloud market, already have a track record of locking in cloud customers. Microsoft charges higher prices for its software when run on rival clouds, and all three charge excessive fees for customers who want to move their data to a competitor. According to the UK’s Competition and Markets Authority, fewer than 1% of cloud customers switch providers each year. Proprietary chips will make switching even harder.
To make matters worse, what few alternatives to Nvidia remain are quickly disappearing. Last Christmas Eve, Nvidia inked a $20 billion deal with chip designer Groq, acquiring licensing rights to its chip designs. As part of the deal Nvidia also acquired Groq’s top executives, including CEO Jonathan Ross, one of the original designers of Google’s TPU.
As a result, AI companies are left with an unenviable choice. They can accept Nvidia’s monopoly prices — its flagship AI chip, the Blackwell, is estimated to cost $6,400 to produce, yet sells for up to $40,000. Or they can commit to a cloud provider’s proprietary chip, and remain beholden to a single supplier. Either way, the pathway to AI chips runs through a few large corporations.
Not surprisingly, these same corporations have leveraged their power to take deep stakes in the corporations that have come to dominate the new AI technologies. Google, which develops Gemini, also owns a 14% stake in Anthropic. Microsoft owns 27% of OpenAI, and holds IP rights to ChatGPT until 2032. Amazon has invested a total of $8 billion in Anthropic, which has committed to using Trainium for its models. Though these cloud giants are capable of creating a more competitive chip market, this competition would threaten the dominance of the AI companies they’ve invested billions in.
One way to foster competition is to make it easier for AI companies to be able to switch between cloud providers. The EU’s Data Act offers a foundation, setting out the technical obligations and transparency standards needed to make cloud switching a reality. But as proprietary chips become a new source of lock-in, these protections may also need to extend to the hardware layer.
Interoperability alone, however, does not address the structural problem. These corporations design the chips needed to compete in cloud computing and then compete in the market themselves. As long as chip design and cloud services remain under the same roof, there is little reason to expect these proprietary chips will be made available to prospective competitors.
The success of Google’s TPU and Amazon’s Trainium shows that Nvidia’s monopoly is not inevitable — alternatives already exist. But when each chip remains locked to a single provider, customers will remain trapped and the chip market uncontested.
Open Markets Publishes Playbook to Stop Private Equity From Taking Over Child Care Industry
The Open Markets Institute, alongside partner organizations, published a seminal report addressing the growing role of private equity in U.S. child care markets, “The Children Before Profits State Playbook.” The report, released with Community Change/Action, National Women’s Law Center, and Americans for Financial Reform Education Fund, equips state and local organizers, advocates, and policymakers with practical tools to stop the encroachment of private equity into child care.
With eight of the 10 largest child care companies in the U.S. currently owned by private equity investors, corporate child care if left unchecked will threaten our vulnerable child care system in the same way private equity has weakened healthcare, home care, and housing industries. Already, we see evidence of some of these threats with corporate-owned businesses charging parents additional fees for basic services like field trips and negative workplace conditions driving increased care worker turnover. In addition, sudden bankruptcies of rapidly growing corporate chains have left families, workers, and communities unexpectedly without care or jobs.
This report describes opportunities for state and local action that can strengthen guardrails that protect families and workers, equitably increase the supply of child care by supporting alternatives to private equity; and build public power to ensure greater corporate accountability. Read the full report here.
📝 WHAT WE'VE BEEN UP TO:
The Open Markets Institute published a policy brief, “Taming the Hyperscalers,” offering a blueprint for Europe’s transition towards an open, competitive, and sovereign cloud market — one that breaks Europe’s dangerous dependence on the cloud infrastructure of the three U.S. tech giants Amazon, Google and Microsoft. Co-authored by Europe director Max von Thun and EU tech policy fellow George Colville, the brief identifies the practical steps Europe needs to take, with an emphasis on rigorous enforcement of existing laws such as the Digital Markets Act and the Data Act.
Courtney Radsch, director of Center for Journalism & Liberty at Open Markets, testified at an Oregon state senate committee hearing on the impact of AI on local journalism. “AI bots are crawling news sites exponentially more times than they are sending traffic back,” Radsch said, noting that AI crawler traffic on news sites now exceeds human traffic, leading to dire consequences such as less advertising and reduced conversion to subscriptions. Her remarks before the joint committee on information management and technology begin at 1:00:30 at this link.
Austin Ahlman and Ben Winsor, who help write Open Markets’ Substack newsletter Liberty & Power, appeared on The Realignment podcast to discuss economic populism in an anti-status quo moment, when polling is and isn’t useful, and populist critiques of the Abundance agenda.
OMI legal director Sandeep Vaheesan and chief economist Brian Callaci participated in the inaugural Association of Law and Political Economy conference in Richmond, Virginia. The two spoke on four panels, addressing topics such as labor antitrust and countering arguments from the Abundance movement. The widely attended event attracted allies from academia, labor, and the plaintiffs’ bar.
Vaheesan also spoke at the Yale Law Seminar in Private Law, where he and Cornell law professor Sabeel Rahman addressed the question of “Can Corporations Be Good Neighbors?” and discussed how law can build a more democratic and just political economy.
Open Markets Europe director Max von Thun applauded the European Commission’s preliminary finding that Meta may have abused its dominant position by excluding third-party AI assistants from WhatsApp. Describing the early intervention as a little-used “landmark decision,” von Thun said, “This sets an important precedent which the Commission should build on throughout the AI market.”
CJL@OMI director Courtney Radsch has joined the board of theguardian.org, the philanthropic arm of The Guardian aimed at supporting independent journalism and citizen participation.
An opinion piece in the Times of San Diego calling for rent control cited the seminal 2024 Harvard Business Review article on the housing crisis by OMI’s legal director Sandeep Vaheesan and chief economist Brian Callaci.
🔊 ANTI-MONOPOLY RISING:
Massachusetts Senator Elizabeth Warren, a Democrat, and Missouri Senator Josh Hawley, a Republican, introduced the Break Up Big Medicine Act to prevent health care conglomerates from simultaneously owning pharmacies, medical providers, pharmacy benefit managers (PBMs), and insurers. The three largest PBMs, which together manage 80% of the country’s prescription drug claims, are respectively owned by pharmacy chain CVS and insurers United Healthcare and Cigna. (The Hill)
In a similar bipartisan move, Senator Hawley teamed with Connecticut Senator Richard Blumenthal, a Democrat, introduced the first bipartisan to prevent data center power usage by dominant AI corporations from spiking consumers’ electric bills. The “Guaranteeing Rate Insulation” or “GRID” Act seeks to ensure first priority for grid access to everyday electric users, and mandate that data center operators publicly disclose current and future power usage.(NBC News)
The European Publishers Council has filed a formal complaint with the European Commission alleging that Google’s use of AI in search such as AI Overviews and AI Mode abuse its dominant position. The complaint argues that Google uses publishers’ journalistic content without authorization, without effective opt-out mechanisms, and without fair remuneration. (European Publishers Council)
📈 VITAL STAT:
87%
The share of the concert ticketing market captured by Ticketmaster, wholly owned subsidiary of Live Nation, which failed in its attempt to have all antitrust claims against it dismissed. Last week, a federal judge ordered the corporation to stand trial for some claims from a 2024 antitrust lawsuit brought by the U.S. Justice Department and 30 states. (Bloomberg)
📚 WHAT WE'RE READING:
The Doom Loop: Why the World Economic Order Is Spiraling Into Disorder: Cornell University trade policy professor Eswar Prasad argues in his latest book that globalization, long believed to promote shared prosperity, has worsened economic inequality and led to trade wars. The author describes how countries once seen as representing a multipolar future, such as India, Brazil, and Indonesia, are increasingly forced to pick sides between the United States and China in a bipolar reality. In his book, Prasad, who is also a senior fellow at the Brookings Institution, calls for radically new solutions rather than the time-worn ones that have brought us here.