THE ECONOMIST: Could AI’s leading men become as powerful as Ford or Rockefeller?

Dario, Demis, Elon, Mark and Sam. The five most important people in artificial intelligence are so famous that first names alone are enough to identify them.

Politicians and journalists hang on their every word. ChatGPT, run by Sam Altman’s OpenAI, has more than 900 million weekly users.

Dario Amodei’s Anthropic has developed an AI model so good at hacking it has caused panic among policymakers.

Demis Hassabis, head of Google’s AI efforts, has won a Nobel prize for his scientific research.

Elon Musk, who runs xAI, among other businesses, is the richest person alive.

Mark Zuckerberg’s Meta has created the West’s most popular family of open-source models, and is spending enormous sums on AI researchers in an attempt to catch up to the technology’s frontier.

In a very real sense, these five men hold the fate of Western civilisation in their hands.

Already the American military uses their AI tools, with some of the tycoons (Mr Altman and Mr Musk) showing more enthusiasm for this than others (Mr Amodei).

Some economists believe that AI will eventually supercharge economic growth. Others say it will put millions out of work. Plenty of people fret that it might end humanity altogether. Not since the splitting of the atom has a new technology created such angst.

It is unnerving that so few men wield such awesome power, particularly men as opportunistic as Mr Altman or as volatile as Mr Musk. But it is hardly unprecedented.

AI’s famous five are but the latest example of a common phenomenon in the history of Western capitalism. There are many examples where a small cluster of men has pushed new technologies forward — not necessarily by inventing them, but by bringing them to the masses. In the process, they have accrued enormous power.

These technologies have shaped how everyone else lives. Railways helped people move farther and faster than ever before. Oil provided the energy for industrial capitalism. Steel made it easier to build taller buildings. Automobiles helped create mass consumerism. Retail banking gave the world credit. The internet monopolised humanity’s attention. All of these technologies made the world richer. They also upturned social norms.

You might think that tycoons are overrated, or worse. Technological progress is the result of the actions of millions of people. No single person invented steel or developed the internet, for instance.

A handful of people monopolise the returns from these collective efforts. Popular anger at the uber-rich stems from the belief that, at best, they were in the right place at the right time — and, at worst, that they are leeching off the rest of society.

Every billionaire is a policy failure, runs the slogan.

This is an uncharitable conclusion. History shows that time and again tycoons have played the decisive role in spreading new technologies to the mass market. They are a necessary condition of innovation.

A paper published in 2023 by Shari Eli of the University of Toronto and colleagues finds that Ford’s development of the Model T, a car first launched in 1908 that was far cheaper than any before it, largely explains why Americans were the first to widely adopt automobiles.

A paper from last year by Ufuk Akcigit of the University of Chicago and co-authors points to the crucial role of so-called “transformative entrepreneurs” in turning inventions into long-run economic growth. In short, prosperity requires tycoons.

To understand how the AI magnates compare with business titans through history, The Economist examined 11 technological waves in America over the past 150 years, from railways to the internet. For each, we picked the top five people responsible for the control, distribution and popularisation of that technology.

We quantified the power of each by looking at the revenue, employment and market value of their companies at their peak, as well as a subjective assessment of the degree of corporate control held by the tycoon, along with their personal wealth.

We consulted books and historical datasets, alongside figures from Forbes, which began tracking the fortunes of the very rich in 1918. The measures were standardised based on the most relevant benchmark, such as GDP or population at the time. For many earlier tycoons, data were poor; fortunes, for example, were often disguised. What follows therefore represents only our best estimate.

Riches alone would not capture the full extent of a tycoon’s power. At his peak the wealth of John D. Rockefeller, founder of Standard Oil, was equivalent to around 1.5 per cent of American GDP. Mr Musk may be richer still, depending on how his wealth is calculated. By our ranking, however, Henry Ford is the most powerful mogul America has seen so far.

Visible hands

Ford was fabulously rich. We estimate that, at his peak, he held assets worth well over one per cent of American GDP. His sprawling estate near his company’s headquarters in Dearborn, Michigan, is beautiful.

Rockefeller was richer still, but employed far fewer people: during Ford’s tenure his car company was truly enormous, employing about 0.15 per cent of the American population in 1925.

Ford also exercised almost complete control over the firm. After buying out minority shareholders in 1919 his family owned the business in its entirety.

No other tycoon, moreover, has done so much to alter society. Ford’s Model T was revolutionary because it was produced at mass scale and aimed at the mass market.

In 1917 more than 40 per cent of cars on America’s roads were Model Ts. Ford’s workers were paid enough — the famous $5-a-day wage — to purchase the vehicles that his factories created.

You can hardly turn a corner in Dearborn today without encountering the man’s legacy: from the Henry Ford Medical Centre to the numerous roads that are named after members of the family.

Most of the other titans in our top 10 — among them Cornelius Vanderbilt (a railway magnate), Andrew Carnegie (a steel tycoon) and Alfred P. Sloan (a former boss of General Motors) — died long ago.

But two living moguls make the cut. One is Jeff Bezos, the founder of Amazon, who comes fourth in our ranking. Amazon employs over one million Americans and is worth $2.7 trillion.

Then there is Mr Musk, at number eight, though his elevated rank is more a reflection of his success in carmaking (Tesla) and rocketry (SpaceX) than AI. Not far behind him, in 11th place, is Mr Zuckerberg, which is likewise a result more of Meta’s dominance over social media than its position in AI.

By contrast, Mr Altman, Mr Amodei and Sir Demis, whose power is more directly tied to AI, all fall in the bottom half of our ranking.

Model-making relies on a small number of clever people and oodles of computing power, meaning that the labs these men run have relatively few workers.

None of the three, moreover, enjoys the kind of corporate control held by Ford or Vanderbilt.

Mr Altman runs OpenAI at the pleasure of his board (which briefly ousted him in November 2023, though it was subsequently purged). Mr Amodei owns only a small stake in the lab he co-founded. And Sir Demis is not even the most senior employee at his company.

In fairness, the technology they wield, unlike the others on our list, is still only in its infancy. Few tycoons of the past had the same potential to shape the direction of numerous industries, from entertainment to defence. And it may be many years until the moguls behind AI reach the apex of their power.

In 1913, 10 years after it was founded, Ford Motor Company was making an annual profit of roughly $1b in today’s money.

OpenAI, which recently reached the same age, is still a long way from making any profits whatsoever.

Power laws

Studying tycoons through history also reveals three important commonalities. The first is that many were deeply strange.

Ford was odd in a bad way, with his paper, the Dearborn Independent, spreading antisemitic poison. Rockefeller was odd in a better way, obsessing over how to save money even as he became fabulously rich.

Vanderbilt liaised with spirits from the nether world; John Pierpont Morgan, a banking titan, consulted astrologers. Thomas Edison, an electricity pioneer, was fanatically opposed to sleep. Steve Jobs, founder of Apple, practised extreme diets.

With this in mind, Mr Musk’s conspiracy theories or Mr Zuckerberg’s robotic demeanour do not seem so out of the ordinary.

The second commonality is that, as these tycoons popularised new technologies, they introduced new dangers.

Some of these were perceived as threats to life and limb. In the early days of railways many scientists worried that humans were biologically incapable of travelling at high speeds.

Aviation was highly unsafe at first. So was drilling for oil. Cars killed pedestrians and occupants alike. The contest between Edison’s direct current and George Westinghouse’s alternating current generated a public-safety panic; Edison’s men staged gruesome public electrocutions of animals to persuade Americans that his rival’s technology was lethal.

Other risks were financial. Over-investment in railways helped cause repeated market crashes in the 19th century.

A bigger banking system spread credit but magnified financial crises. And many of these new technologies automated jobs, putting people on the economic scrapheap.

Railways and cars crushed horse-based locomotion. Electrification removed the mechanical constraints that had prevented automation in manufacturing.

The third commonality concerns relations between magnates and the state.

The tycoons of the 19th century undoubtedly had more latitude than their modern counterparts: more scope to control markets; more ability to discipline labour; more opportunities for cronyism.

Carnegie violently suppressed labour unrest. Morgan held so much sway over the financial system that during a market meltdown in 1907 he personally functioned as America’s central bank.

Andrew Mellon, another magnate on our list, served as treasury secretary while continuing to steer one of America’s largest industrial empires.

Yet from the 20th century onwards, governments curbed many of the earlier tycoons’ worst excesses.

In 1911 the Supreme Court ordered the breakup of Standard Oil into 34 independent companies after ruling it had violated antitrust law.

In part to avoid another Morgan-style bail-out, in 1913 Congress created the Federal Reserve. Reforms in the 1930s made it harder for magnates to control vast holding companies.

In 2000 a judge ordered the breakup of Microsoft for unlawful monopolisation (the software giant narrowly escaped dismemberment on appeal, but was chastened nevertheless).

As AI transforms the economy and society, the people behind it may likewise encounter governments that wish to curb their power.

In theory, capitalism tends to be presented as impersonal and decentralised. In practice, however, its most important phases are often driven forward by individuals.

Time and again, towering, quasi-autocratic figures have gained control over large swathes of the economy. The men currently propelling AI may not necessarily be among their number. But if history is any guide, a Rockefeller or Ford is likely to emerge soon enough.