AI Concentrates Value. It Doesn’t Distribute It.

AI isn’t distributing value. It’s concentrating it faster than anything we’ve seen.

The narrative:

AI lifts all boats.

The data says otherwise.

Magnificent 7:

• ~34.9% of S&P 500
• ~42% of returns

This aligns with:

• “Superstar firm” theory
• Granularity theory

Both show:

A small number of firms drive the majority of outcomes.

Why?

Because AI advantages:

• Infrastructure owners
• Platform ecosystems
• Data monopolies

Not small players.

Conclusion: AI doesn’t democratize returns. It centralizes them.

Question: If value keeps concentrating, what happens to everything outside the top layer?