Here’s how we get the healthy, secure cloud market we need. vanderbiltpolicyaccelerator.substack.com/p/why-and-ho...

My paper is a blueprint for reform based on tried & tested regulations: structural separation, neutrality, interoperability, critical infrastructure designation, foreign ownership restrictions, & know-your-customer requirements.

Our reliance on an unregulated and oligopolistic cloud market that is central to the AI race w/ China is a glaring national security risk.

Opaque pricing and high switching costs, including “egress fees” just to move your own data out, make things worse. These failures stifle innovation and lock in dependence on a few players.

Amazon, Microsoft, Google control two-thirds of the market, making it a clear oligopoly. Each is a vertically integrated conglomerate. For AI companies, cloud providers are simultaneously suppliers, customers, competitors, and investors, creating massive conflicts of interest.

Cloud companies pulled in >$600B of revenue–multiples of AI companies. For context, AWS raked in $108B in 2024, while by comparison, OpenAI is hauling in $12B/yr. Even semiconductor companies don’t make as much as AWS.

Antitrust: Federal antitrust actions against AT&T, IBM, Microsoft allowed chip, software, internet, and AI markets to flourish with competition. Trump’s AI action plan signals halting Big Tech investigations and weaken settlements. 7/7

Noncompetes: Silicon Valley’s history—chips, then software, internet companies recently, and AI now—was built on CA’s constitution effectively banning noncompetes. A Trump judge and this FTC are stalling Biden efforts for a national ban. 6/7

Immigration: Transformers—the T in ChatGPT—were developed by a mostly immigrant team. Most leading AI startups have an immigrant founder. Trump’s anti-immigrant policies are driving top AI talent away. 5/7