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Illustration: Lazaro Gamio/Axios

The explosion of technology in every facet of life is a big reason that the rich are getting richer, and the big are getting bigger.

Why it matters: The result could be more income inequality, and the creation of vast amounts of wealth, but without corresponding broad prosperity. This, in turn, causes political and social instability.

  • Scary thought: The situation is on track to get worse, because artificial intelligence will make the internet look like the Apple II.

How we got here: The idea of disruption is that technology enables small, nimble companies to supplant lumbering old giants.

  • But the pre-internet giants — Microsoft, Intel, IBM — are all doing very well.
  • And the ability of those giants to spend enormously on technology has helped them maintain their dominance. The more data they get, the more powerful and valuable they become.

Advocates for Big Tech argue that it democratizes — that code is a meritorious equalizer.

  • Facebook was built without institutional knowledge or legacy backing.
  • Google, too. Ditto Amazon. And Uber.
  • Thanks to the cloud, you can build a better mousetrap without tons of cash.

The harsh reality behind Big Tech's power consolidation is clear in these five trends, reported by Axios’ Sara Fischer, Ina Fried, Steve LeVine, Dan Primack, Scott Rosenberg and Felix Salmon:

1. Data begets data, and that begets power.

  • Today's giants have a big leg up on the next wave of tech: Prediction engines built on machine learning are entirely dependent on gobs and gobs of data.
  • In the past, you could usurp incumbents by fundamentally improving on a core technology. Think Google in search, Apple in phones.

2. Size begets more heft and dollars.

  • Big Tech buys up the best AI, quantum, robotics, driverless car tech, and other talent for the industries of the future.
  • The very biggest companies — Microsoft, Google, Facebook, along with their Chinese rivals Baidu and Alibaba — are poised to run away with AI.
  • When a startup does come up with a brilliant new idea, Big Tech often buys the upstart. If the startup won't sell, Big Tech copies the idea.

3. Automation screws a lot of workers.

  • Companies want profits and greater efficiencies so they replace people with machines. The company gets bigger, the person creating the tech gets richer; the worker often gets shafted. Again, AI probably makes this worse, not better.
  • AI and machine learning are poised to replace humans in many tasks in knowledge work, including some functions now performed by lawyers, paralegals and radiologists.
  • Tech also creates new jobs — we have plenty of occupations that didn't exist 30 years ago. The question is how long and deep the in-between chasm is.

4. Algorithms favor the fortunate in big business.

  • The well-connected get tips on lucrative deals. And use (or benefit from) algorithms to get better returns on their investments.
  • They also hold the tech stocks rising fastest in values.

5. Tech is also making big, bigger in media.

  • Yes, Google and Facebook ate a lot of media revenue.
  • But the major media players have the resources to take bigger risks, innovate faster and develop more strategic relationships with the tech platforms.
  • Those relationships help them get ahead of product or algorithm changes before they get crushed by them — like the new smaller players do.

Be smart: Optimists point out that the tech pendulum has always swung from concentrations of centralized power to periods of decentralizing breakthroughs. But so far that’s mostly swinging wealth and power to the wealthy and powerful.

Go deeper: A new form of American capitalism

Go deeper

56 mins ago - World

U.S. strikes Iran-backed militia structures in Syria

President Biden at the Pentagon on Feb. 10. Photo: Alex Brandon - Pool/Getty Images

The United States on Thursday carried out an airstrike against facilities in Syria linked to an Iran-backed militia group, the Pentagon announced.

The state of play: The strike, approved by President Biden, comes "in response to recent attacks against American and Coalition personnel in Iraq, and to ongoing threats to those personnel," Pentagon press secretary John Kirby said in a statement.

Senate parliamentarian rules $15 minimum wage cannot be included in relief package

Photo: Al Drago/Getty Images

The Senate parliamentarian ruled Thursday that the provision to increase the minimum wage to $15/hour cannot be included in the broader $1.9 trillion COVID relief package.

Why it matters: It's now very likely that any increase in the minimum wage will need bipartisan support, as the provision cannot be passed with the simple Senate majority that Democrats are aiming to use for President Biden's rescue bill.

Dave Lawler, author of World
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Biden's big Saudi reset

Mohammed bin Salman. Photo: Ryad Kramdi/AFP via Getty

President Biden spoke with Saudi Arabia's King Salman this evening ahead of the release of a CIA report expected to implicate the king's son, and the kingdom's de facto ruler, in the murder of a U.S.-based journalist, Jamal Khashoggi.

Why it matters: In one month, Biden has ended support for the Saudi war effort in Yemen, frozen a large arms deal and snubbed Crown Prince Mohammed bin Salman (MBS) by declining to speak with him directly.