Article by Isobel Moure, Tim O’Reilly and Ilan Strauss: “Can we head off AI monopolies before they harden? As AI models become commoditized, incumbent Big Tech platforms are racing to rebuild their moats at the application layer, around context: the sticky user- and project-level data that makes AI applications genuinely useful. With the right context-aware AI applications, each additional user-chatbot conversation, file upload, or coding interaction improves results; better results attract more users; and more users mean more data. This context flywheel — a rich, structured user- and project-data layer — can drive up switching costs, creating a lock-in effect that effectively traps accumulated data within the platform.
Protocols prevent lock-in. We argue that open protocols — exemplified by Anthropic’s Model Context Protocol (MCP) — serve as a powerful rulebook, helping to keep API-exposed context fluid and to prevent Big Tech from using data lock-in to extend their monopoly power. However, as an API wrapper, MCP can access only what a particular service (such as GitHub or Slack) happens to expose through its API.
To fully enable open, healthy, and competitive AI markets, we need complementary measures that ensure protocols can access the full spectrum of user context, including through:
1. Guaranteed access, for authorized developers, to user-owned data, through open APIs at major platforms.
2. Portable memory that separates a user’s agentic memory from specific applications.
3. Guardrails governing how AI services can leverage user data.
Drawing on the example of open-banking regulations, we show that security and data standards are required for any of these proposals to be realized.
Architecting an open, interoperable AI stack through the protocol layer is about supporting broad value creation rather than value capture by a few firms. Policy efforts such as the EU’s General-Purpose AI Code of Practice do matter; but, ultimately, it is software architecture that most immediately and decisively shapes market outcomes. Protocols — the shared standards that let different systems communicate with one another — function as a deeper de facto law, enabling independent, decentralized, and secure action in digital markets…(More)”.
