{"id":1459889,"date":"2025-12-15T09:07:17","date_gmt":"2025-12-15T08:07:17","guid":{"rendered":"https:\/\/www.ie.edu\/insights\/?post_type=articles&#038;p=1459889"},"modified":"2025-12-15T10:33:16","modified_gmt":"2025-12-15T09:33:16","slug":"how-ai-companies-became-empires","status":"publish","type":"articles","link":"https:\/\/www.ie.edu\/insights\/articles\/how-ai-companies-became-empires\/","title":{"rendered":"How AI Companies Became Empires"},"featured_media":1459890,"template":"","meta":{"_has_post_settings":[]},"schools":[],"areas":[508],"subjects":[422],"class_list":["post-1459889","articles","type-articles","status-publish","has-post-thumbnail","hentry","areas-artificial-intelligence","subjects-innovation-and-technology"],"custom-fields":{"wpcf-article-leadin":["Karen Hao's <span data-teams=\"true\">new book <i>Empire of AI <\/i>reveals<\/span> how AI\u2019s explosive growth is masking an empire built on hidden labor, vast resources, and an \"AGI ideology\", writes Guillermo de Haro."],"wpcf-article-body":["Imagine thinking you\u2019re just chatting with a helpful bot about homework, strategy slides, or perhaps travel plans, only to find yourself helping to build an empire.\r\n\r\nWithin weeks of its launch, ChatGPT reached roughly 100 million users. It has since grown to hundreds of millions of regular users worldwide, becoming one of the fastest\u2011adopted apps in history.\u00a0For many people, that\u2019s where the story ends: a clever tool, a runaway success, another Silicon Valley fairy tale.\r\n\r\nFor\u00a0journalist Karen Hao, it\u2019s only the prologue to something far more unsettling.\r\n\r\nI recently spoke with Hao about her book <em>Empire of AI: Dreams and Nightmares in Sam Altman\u2019s OpenAI<\/em>, which traces how a research lab turned global AI boomtown helped create a new kind of power: corporate empires built on data, energy, and labor, all wrapped in the language of saving humanity.\r\n\r\nHao studied mechanical engineering, worked briefly in Silicon Valley, and quickly realized that tech culture wasn\u2019t where she wanted to spend her life. Writing had always been a passion and within a year she pivoted into journalism.\r\n\r\nThat technical background never went away. At <em>MIT Technology Review<\/em>, she spent years covering AI research and its social impacts, eventually publishing a four\u2011part series on \u201cAI colonialism\u201d and how AI systems built in wealthy countries rely on resources and people from poorer ones, often repeating familiar patterns of extraction and inequality.\r\n\r\nShe was already toying with the idea of a book on AI and colonialism when ChatGPT arrived. The LLM didn\u2019t just dominate headlines; it turned the whole industry towards ever\u2011larger, more energy\u2011hungry models and unleashed a tidal wave of hype. Suddenly everyone was an \u201cAI expert,\u201d and, Hao felt, the quality of information available to the public sharply deteriorated. And this was the moment the book crystalized. She would tell the story of OpenAI\u2019s rise, how we arrived at ChatGPT \u2013 and set it within a much older story: the story of empire.\r\n\r\n<strong>AI as a new imperial frontier<\/strong>\r\n\r\nWhy \u201cempire\u201d? For Hao, the parallel is not a metaphor of convenience but a structural comparison. Historic empires seized land, minerals, and human labor from colonies to enrich a small elite at the center. Today\u2019s AI giants, she argues, operate in eerily similar ways: hoovering up data, exploiting poorly paid workers to label and moderate it, and siting energy\u2011hungry data centers in places that bear the environmental costs \u2013 all while concentrating wealth and power in a handful of companies and countries.\r\n\r\nHao\u2019s reporting tracks data annotators in countries like Kenya, paid just a few dollars an hour to sift through toxic content so that systems like ChatGPT do not traumatize users instead. It follows communities in Chile and elsewhere whose water and energy systems are strained by giant data centers built to fuel the AI boom.\r\n\r\nHao\u2019s point isn\u2019t that AI is uniquely evil but that the way we have chosen to build it \u2013 who pays the costs and who reaps the benefits \u2013 looks like a high\u2011tech update of a 19th\u2011century imperial model.\r\n\r\nOne of the book\u2019s most striking arguments is how avoidable this trajectory is. Many forecasts now suggest data centers could more than double their share of U.S. electricity use by 2030, with AI\u2011related buildout accounting for 30 to 40% of all new demand this decade.\r\n\r\nThose numbers are not inevitable laws of nature; they\u2019re the result of a particular bet: that bigger is always better, especially in AI. Train on more data, run larger systems, accept the higher costs. Hao likens AI development to choosing a path through a forest. One route bulldozes straight through, clear\u2011cutting trees and wildlife. Another path winds around, leaving the forest largely intact. Both get you to the other side, but Silicon Valley has convinced much of the world that only the clear\u2011cutting route can possibly deliver the magical benefits we\u2019ve been promised.\r\n\r\nHer counterargument is straightforward: useful AI systems can be built with smaller, more efficient models, locally controlled infrastructure, and tighter regulation of training data. The idea that massive energy use and extraction is the \u201cprice of progress\u201d is itself part of the empire\u2019s narrative.\r\n\r\n<strong>AGI as a religion<\/strong>\r\n\r\nIf empire is the structure, AGI (artificial general intelligence) is the theology.\r\n\r\nHao interviewed hundreds of employees across top AI companies, particularly at OpenAI. Many genuinely believe they are inching toward systems that are as capable as, or surpass, human intelligence. Keep in mind that they see internal demos and prototypes that the public never does. Combined with life inside a tight Silicon Valley bubble where optimism is constantly reinforced, skepticism can begin to seem irrational. People describe themselves as \u201cAGI believers\u201d or \u201cAGI\u2011pilled.\u201d They know they\u2019re working inside a myth, and they lean into it.\r\n\r\nFor the rest of us, the sales pitch is framed differently but is no less powerful. Hao likens AGI to the enchanted mirror in Harry Potter that reflects your deepest desire. Look into the future that AI leaders describe, and you might see the end of poverty, a cure for cancer, endless economic growth, or personalized education for every child. Whatever you long for, AGI conveniently promises it.\r\n\r\nWhen so much appears to be on offer \u2013 if only we keep up the supply of money, data, and electricity \u2013 it becomes very hard to say no. That mix of insider devotion and public yearning gives the AI empire its ideological fuel.\r\n\r\n<strong>The strange case of OpenAI\u2019s governance<\/strong>\r\n\r\nThe empire isn\u2019t just about lofty dreams; it\u2019s wired into corporate plumbing. OpenAI\u2019s unusual governance is a perfect example.\r\n\r\nHao begins with a talent problem. Early on, Sam Altman and his co\u2011founders needed to attract elite researchers, for example those who would otherwise work at Google. Rather than trying to outbid Google on salaries, OpenAI competed on mission, launching as a nonprofit dedicated to building safe AI \u201cfor the benefit of all humanity.\u201d It was a powerful signal to idealistic researchers that they\u2019d be doing something bigger than optimizing ad clicks.\r\n\r\nOnce the team was assembled, with stars like Ilya Sutskever, the bottleneck shifted. Massive supercomputers and gigantic training runs require staggering amounts of cash, so OpenAI created a for\u2011profit arm, nested under the nonprofit, to raise billions from investors like Microsoft and, later, SoftBank. That\u2019s when the contradictions started to bite and internal tensions began to grow. Early employees believed they\u2019d joined a charity; later hires thought they were working at a hot startup. Disagreements over mission versus revenue escalated until they erupted in 2023 when Altman was abruptly fired \u2013 and just as abruptly reinstated after staff revolt and investor pressure.\r\n\r\nThe drama didn\u2019t end there, of course. Under regulatory scrutiny, OpenAI has since embarked on an intricate recapitalization, transforming its commercial arm into a public benefit corporation that can raise money more easily while remaining under the formal control of the nonprofit, with the attorneys general of Delaware and California acting as key watchdogs. On paper, it\u2019s a compromise between mission and market. In practice, Hao argues, it shows just how far the company has travelled from its original identity as a humble research nonprofit \u2013 and how difficult it is to restrain an empire once it begins to expand.\r\n\r\nIt\u2019s tempting to frame all of this as yet another tale of a tech \u201cgenius\u201d CEO. Silicon Valley thrives on these stories. Hao resists overdoing the psychologization, but she does reveal a vicious cycle at work. To even attempt to \u201cbuild the future\u201d for billions of people, a certain level of ego is necessary. Success amplifies that. Power insulates leaders from criticism, friction disappears, and dissent becomes ever easier to dismiss. In fact, the more critics push back, the more such leaders seem to double down.\r\n\r\nStill, <em>Empire of AI<\/em> is not a character study. Its real target is the system that allows a handful of companies \u2013 and the people who run them \u2013 to shape global infrastructure, the information flows, and political choices.\r\n\r\n<strong>Empire versus democracy<\/strong>\r\n\r\nThis is where the metaphor becomes most unsettling. Historic empires did not merely extract resources; they also ruled. According to Hao, today\u2019s AI empires impose a quiet yet profound threat to democracy. They control the models that generate information, the platforms that distribute it, and the analytics that decide who sees which political message. Their data centers reshape local economies and ecosystems without meaningful consent from affected communities. Their lobbying muscle bends regulation toward their interests, sometimes even pushing for laws that block local governments from regulating AI at all.\r\n\r\nMeanwhile, the public is told that AI is inevitable and that any attempt to slow or redirect it risks economic decline or geopolitical defeat. That\u2019s not a level playing field. It is a colonial bargain, repackaged.\r\n\r\nFor Hao, the conclusion is stark: democracy and empire cannot thrive together<strong>.<\/strong> When a small cluster of firms and founders essentially governs the digital infrastructure of the whole world, meaningful self\u2011government increasingly becomes an illusion.\r\n\r\nThis is not a call to smash machines or retreat to a pre\u2011digital age. Hao is explicit that the goal is not to eliminate AI firms but to stop them from becoming \u2013 or remaining \u2013 empires.\r\n\r\nThat could mean antitrust action, as happened with earlier oil and telecom giants. It could mean stronger labor protections for data workers, democratic control over where data centers are built and how they\u2019re powered, and tighter global rules around data use and surveillance. It may also require public and civic alternatives: open models, public compute, and regional AI projects controlled by the communities they serve rather than by Silicon Valley boards.\r\n\r\nAbove all, it requires puncturing the myth that there is only one road through the forest.\r\n\r\nThe next time you hear someone promise that AGI will solve climate change, cure disease, and usher in universal prosperity, take a pause, and as Hao\u2019s work suggests, ask yourself: Whose future is being promised here, and whose forest is being cut down to build it?\r\n\r\n&nbsp;\r\n\r\n\u00a9 IE Insights."],"wpcf-audio-article":["https:\/\/www.ie.edu\/insights\/wp-content\/uploads\/2025\/12\/How_AI_Companies_Became_Empires_1765785773773.mp3"],"wpcf-article-extract":["Karen Hao's <span data-teams=\"true\">new book <i>Empire of AI <\/i>reveals<\/span> how AI\u2019s explosive growth is masking an empire built on hidden labor, vast resources, and an \"AGI ideology\", writes Guillermo de Haro."],"wpcf-article-extract-enable":["1"]},"_links":{"self":[{"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/articles\/1459889","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/articles"}],"about":[{"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/types\/articles"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/media\/1459890"}],"wp:attachment":[{"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/media?parent=1459889"}],"wp:term":[{"taxonomy":"schools","embeddable":true,"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/schools?post=1459889"},{"taxonomy":"areas","embeddable":true,"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/areas?post=1459889"},{"taxonomy":"subjects","embeddable":true,"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/subjects?post=1459889"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}