The Bank of Italy held a symposium with LUISS University examining market power across artificial intelligence (AI) supply chains and its implications for finance. Discussions focused on how concentration among technology providers affects competition and creates potential risks to operational resilience and financial stability, alongside the benefits AI offers in data processing and analysis. The discussion explored how economies of scale, network effects and vertical integration shape competition across computing infrastructure, AI models and applications. It also addressed how large firms that both supply and use AI technology can reinforce their dominant positions, influence pricing, compress rivals’ margins and affect the transmission of shocks through global supply chains. For financial services, a central concern was growing reliance on hyperscalers, the large technology providers supplying analytical and computing capacity. These relationships can generate efficiencies, but dependence on a small number of providers can create single points of failure. The symposium considered these developments from the perspectives of financial stability and competition policy.
Bank of Italy examines AI market concentration and financial sector risks at symposium
The Bank of Italy held a symposium with LUISS University on market power in AI supply chains and the implications for financial services. Discussions examined how dominant technology firms shape competition and how financial institutions’ reliance on a few large providers can deliver analytical efficiencies while creating concentration risks and single points of failure.