The Subsidy Paradox — Why Cursor Sold to SpaceX

The Subsidy Paradox — Why Cursor Sold to SpaceX

We break down the economic structure of the AI developer market in this episode. We discuss how dependence on upstream foundation models compels downstream innovators to flow both capital and highly refined telemetry back to their vertically integrated competitors. We objectively evaluate the proposed solution, the acquisition of Cursor by SpaceX/xAI. Is the deal a classic case of vertical foreclosure that will harm competition or a necessary defensive merger that ends a data monopoly? We walk through the specific efficiencies of the deal, including cost reduction, performance optimization, and the removal of the innovation barriers. Read the full article and graphic analysis: https://blog.econworks.com/p/the-subsidy-paradox-why-cursor-sold?r=562wri [https://blog.econworks.com/p/the-subsidy-paradox-why-cursor-sold?r=562wri] Explore more visual economics content: https://econworks.com YouTube: https://www.youtube.com/@EconWorks-d3e Substack: https://blog.econworks.com [https://blog.econworks.com] This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit blog.econworks.com/subscribe [https://blog.econworks.com/subscribe?utm_medium=podcast&utm_campaign=CTA_2]

Control in AI—Episode 2: Governance and Control in AI

AI Antitrust Series. Episode 2: In our second episode, we deconstruct the AI stack (Model → System → Interface) and show how control at the model layer determines access, capabilities, integration, and ultimately who wins the AI economy. We explore why economies of scale, learning effects, and scope make the model layer the main bottleneck. We compare it to the Apple ecosystem and discuss the two competing visions: AI as open infrastructure vs. AI as a tightly controlled platform. By the end of this episode, you will understand why governance is the new question at the heart of AI—not just who gets to build the best model but who gets to decide the rules of the whole system. It’s perfect for anyone who wants to understand the deeper economics and power dynamics behind the AI revolution. Read the full article and graphic analysis: Explore more visual economics content: https://econworks.com YouTube: https://www.youtube.com/@EconWorks-d3e Substack: This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit blog.econworks.com/subscribe [https://blog.econworks.com/subscribe?utm_medium=podcast&utm_campaign=CTA_2]

Are Platforms Breaking Antitrust?

What happens when the “market” isn’t a product—but a platform? In this episode, we unpack why traditional antitrust tools struggle with platforms and introduce a new way to think about them. From credit cards to Google to sports leagues, not all platforms work the same way—and that distinction matters more than you think. Read the full article and graphic analysis: https://blog.econworks.com/p/when-the-platform-is-the-market?r=562wri [https://blog.econworks.com/p/when-the-platform-is-the-market?r=562wri] Explore more visual economics content: https://econworks.com YouTube: https://www.youtube.com/@EconWorks-d3e Substack: This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit blog.econworks.com/subscribe [https://blog.econworks.com/subscribe?utm_medium=podcast&utm_campaign=CTA_2]

Mattresses, Mergers & Vertical Power: AI Wraps Up Season 1

The season finale tackles the FTC’s challenge to Tempur Sealy’s vertical merger with Mattress Firm. Was the merger a smart efficiency play in retail and manufacturing, or did it risk anticompetitive foreclosure? In this episode, AI critiques the expert economic analysis, focusing on vertical merger guidelines, concentration risks, and real-world retail dynamics. We compare the AI take to the court’s perspective and close season 1 with big-picture lessons on how antitrust should handle innovation, efficiency, and evidence in fast-changing markets. Read the full article and the graphic analysis: https://blog.econworks.com/p/ai-v-judge-episode-5-ftc-vs-tempur?r=562wri [https://blog.econworks.com/p/ai-v-judge-episode-5-ftc-vs-tempur?r=562wri] Explore more visual economics content: https://econworks.com YouTube: https://www.youtube.com/@EconWorks-d3e Substack: This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit blog.econworks.com/subscribe [https://blog.econworks.com/subscribe?utm_medium=podcast&utm_campaign=CTA_2]

The $2.5 Billion Question in Pharmaceutical Antitrust

In this episode, we examine the economic foundations of reverse-payment antitrust law through the lens of the Takeda verdict. The Supreme Court’s *Actavis* decision shifted the focus from patent validity to payment size—but left unresolved how courts should measure what counts as “large.” We explore the circularity embedded in the framework, the role of damages models, and why jury decisions may ultimately substitute for missing economic methods. Read the full article and the graphic analysis: https://blog.econworks.com/p/the-885-million-question-actavis?r=562wri [https://blog.econworks.com/p/the-885-million-question-actavis?r=562wri] Explore more visual economics content: EconWorks [https://econworks.com] YouTube [https://www.youtube.com/@EconWorks-d3e] Substack [http://blog.econworks.com] This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit blog.econworks.com/subscribe [https://blog.econworks.com/subscribe?utm_medium=podcast&utm_campaign=CTA_2]