The Consolidation-Expansion Dynamic in the Digital Media Market: Cycles of Diversification, Concentration, and Recentralization

This chapter develops a media economy account of how autonomous AI agents and generative AI are mobilized by global digital media platforms as strategic infrastructures that reorganize production, distribution, governance, and monetization. Moving beyond “productivity” framings, it models an accelerated restructuring cycle: diversification, outward expansion, reconcentration, and recentralization, through which firms broaden scope while reanchoring power in a smaller set of data, compute, and interface control points. Two rationales drive this shift: regulatory hedging under intensifying antitrustAntitrust and platform governance regimes, and transaction cost substitution whereby agentic systems internalize coordination and integration once sought through mergers, acquisitions, or alliances. Mechanisms of integration without acquisition, including compute commitments, model licensing, minority stakes, and licensing plus talent deals, show how incumbents secure preferential model access and ecosystem leverage while reducing merger control exposure, even as regulators widen scrutiny from ownership to influence and exclusivity. From these regularities, the chapter derives propositions on firm boundary expansion, infrastructural bottlenecks, and AI-enabled recentralization. A post ChatGPT contraction in GAFAM merger activity is interpreted as a signal consistent with capability-led integration. The chapter concludes with diagnostics for detecting functional consolidation and implications for competition policy centered on contestable infrastructures, interoperability, portability, transparency, and legitimacy.