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Paper short abstract

Challenging AI “catch-up” narratives in development, this paper draws on Hymer to analyse the political economy of platform capitalism. It shows how AI operates as private infrastructure, concentrating power in Big Tech and producing firm-level hierarchy, rent extraction, and digital dependency.

Paper long abstract

Contemporary discussions of artificial intelligence and development frequently call on “catch-up” narratives, suggesting that AI diffusion may enable late-developing economies to leapfrog established industrial trajectories. This paper questions such claims by combining an analysis of platform capitalism with insights from Stephen Hymer’s theory of firm-level power and foreign direct investment.

The paper conceptualises platform capitalism as a structural transformation in which economic coordination, value extraction, and market governance are organised through digital platforms that function as privately owned infrastructures, controlled by Big Tech firms. Rather than competing within markets, firms increasingly control markets by setting rules, governing access, and extracting rents through data, algorithms, and proprietary standards.

The paper advances three arguments. First, AI-led accumulation and adoption are driven primarily by control rather than efficiency. Returns accrue disproportionately to owners of capital controlling models, data, and compute, reinforcing capital–labour asymmetries within and across countries, with implications for labour insecurity, deskilling, and bargaining power. Second, asymmetries in firm-level power precede and shape state-level outcomes. What is distinctive in the AI era is that a small number of large language model firms operate as general-purpose infrastructures, exercising cross-sectoral influence through platforms and APIs rather than sector-specific dominance. Third, technological advantage brings durable dependency through organisational hierarchy: although peripheral economies may adopt AI technologies, they remain structurally excluded from co-determining model architecture, standards, and innovation trajectories, contributing to new forms of digital dependency and dispossession.

Revisiting Hymer clarifies how AI reshapes development through the reorganisation of power, hierarchy, and coordination in contemporary capitalism.