AI Impact on Entrepreneurs vs. Incumbents

This summer marked 10 years since Hitchbot’s decapitation. The cheerful, solar-powered, talking bucket on legs had been built by Canadian researchers to explore one question: Can robots trust humans? Hitchbot hitchhiked safely across Canada, danced through the Netherlands, charmed Germany, and made it two weeks in the United States. Then it reached Philadelphia. Destroyed. Decapitated. Head never found. 

At the time, Philadelphians reveled in the headlines reinforcing the city’s tough reputation. A decade later, amid widespread automation anxiety, the moment looks more like a prophecy. Before the tech-lash and mainstream AI-ethics debates, emerging technology still felt whimsical. Hitchbot’s destruction wasn’t only vandalism; it was a primal reaction to something deeper. Like the 19th-century Luddites smashing textile machines, the anonymous Philadelphian who dismantled that talking bucket was expressing a truth many hadn’t yet faced: Technology is neither good, nor bad, nor neutral. As Kranzberg’s first law reminds us (and as Technical.ly’s own AI ethics principles articulate), it’s not what the technology is; it’s what we collectively do with it. Hitchbot wasn’t a victim of cruelty. It was a warning.

Now, as generative AI reshapes nearly every information system, the question for entrepreneurs, ecosystem builders, and economic development leaders is clear: Will AI expand opportunity, or entrench incumbents?

Lessons from the Past: The Internet’s Influence

Not every technology hits society with equal force. In his 2024 book “On Edge,” celebrity statistician Nate Silver introduces his Technological Richter Scale, rating inventions from 0 to 10 based on their disruptive power. VCRs sit at a 6; credit cards and social media at a 7. Electricity peaks at an 8, while fire and the wheel earn a 9. His only perfect 10? Humans becoming the dominant species. Silver posits that AI already ranks at a solid 7, a tremor no one sleeps through, with space for escalation.

This context is crucial as we recall the early commercial internet, which seemed like a utopia for small startups. A web browser and a modest hosting account granted global reach, leading to a burst of creative activity. Soon though, consolidation followed, narrowing the field to a few dominant platforms that dictated terms to many. Although social media and the internet created numerous jobs and increased wages, they also coincided with historical economic concentration. Today, the Buffett Indicator, which measures the value of US firms relative to GDP, is at its all-time high. AI seems poised to follow this trajectory — but at an accelerated pace.

For the first time ever, according to AI-monitoring firm Graphite, more online articles were generated by AI than by humans in November 2024. With marginal content creation costs plummeting and distribution resting in the hands of a few giants, the economic implications are stark: those with the most data, compute, and capital will seize the vast majority of benefits. Left unchecked, AI will naturally reinforce the power of incumbents.

Mixed Perspectives on AI’s Potential

If you’re passionate about entrepreneurship, especially local entrepreneurship, the real question is not whether to embrace or oppose AI but whether we can harness this technology for those eager to innovate.

On a recent episode of Builders Live, a podcast focused on entrepreneurial ecosystems, there was an engaging debate among my co-hosts regarding AI’s potential trajectory. Investor Brian Brackeen posited that inexpensive, powerful tools democratize access to vast resources and opportunities, granting entrepreneurs the tools they need to succeed.

However, Right to Start founder Victor Hwang emphasized systemic barriers. Access to these tools may lower some hurdles, yet the overarching economic framework can raise others, making creation more complex than consumption. Rae’mah Henderson, an investment associate at Techstars, voiced skepticism regarding capitalism’s ability to serve all, indicating a loss of trust in established systems. This triad of perspectives—excitement for tools, frustration at existing structures, and distrust of incumbents—forms the emotional backdrop for AI’s entrepreneurial future.

Incumbents and the New Entrepreneurial Landscape

AI itself is not inherently centralized nor decentralized; in practice, however, its advantages tend to favor incumbents. Two key realities illustrate this: AI’s reliance on data, which incumbents naturally possess in abundance, and its dependence on compute power, which requires substantial capital, increasingly concentrated among a few hyperscalers.

This dynamic underpins current consumer market trends, such as the rise of dynamic pricing. The companies with the most comprehensive data win, and AI has sharpened this competitive advantage. Entrepreneurs cannot simply step away from these shifts; they must navigate into markets increasingly defined by algorithmic asymmetry, prompting reflections on which types of entrepreneurs are likely to thrive.

AI is clearly accelerating progress for certain types of founders, including: solo creators, developers utilizing AI-enhanced workflows, non-technical founders accessing previously restricted capabilities, and both immigrant and rural entrepreneurs leveraging AI for translation and support. Additionally, it nurtures certain ecosystems like regions treating AI as public infrastructure and states simplifying business startups.

A Path Forward: Supporting Entrepreneurs Through AI

For AI to foster innovation rather than consolidation, three priorities should be established: first, make it easier to start and grow a business than to scroll aimlessly online. This should involve developing AI tools that minimize entrepreneurship friction, such as powering up resource navigation and assisting permits.

Second, when governments implement AI consumer-service systems, they must consider who gains access to these resources that hadn’t before. Third, while states should take the lead in this space, it’s critical they maintain accountability regarding governance and audits to clarify the pathways available to entrepreneurs.

The Ongoing Role of AI in Society

AI won’t be the last technological advancement to incite unease, nor should fear guide policy formulation. It can enhance governance efficiency and community well-being, but it requires careful handling to ensure both safety and effectiveness. AI can empower a solo founder in a smaller town while simultaneously allowing large platforms to extract value from those new entrants. The resolution lies in our proactive engagement with technology and policymakers’ navigational strategies in this shifting landscape.

Ultimately, the trajectory we follow depends on how we choose to act now. Technology doesn’t become harmful simply because it exists; rather, it is our reception and management that shapes its impacts. Hitchbot’s story serves as a reminder that the fate of technologies, from AI to autonomous robots, is within our collective agency. The challenge remains: will we create systems that uplift innovators or simply maintain the status quo?