In Bain’s 2024 Technology Report, we noted the remarkable resilience of today’s most valuable technology companies and their ability to co-opt disruption (see the chapter “How Tech Leaders Commercialize Innovation”). Several tech giants with the largest market caps have maintained their lead for 15 years or more. That’s a big change from earlier eras when disruptive innovation regularly vaulted new companies to the top spots while moving old ones aside. The difference appears to be that today’s leaders are better at adapting to technology shifts due to their ability to self-disrupt and reinvent their businesses.

Will AI change that? AI (generative and agentic), with its ability to transform work processes and the unprecedented speed of its adoption, is this decade’s disruption in tech and beyond. Looking at today’s top 20 tech companies gives us insight into whether we expect the existing leaders to remain at the top, or if we may see significant shifts. At first glance, today’s value creation pattern mirrors what we saw during the shift to cloud computing: lots of value created by the incumbents (Amazon, Microsoft, Alphabet, Meta, Nvidia) and a few others, but also a set of vibrant entrants creating winning models, tools, and applications (see Figure 1).

But AI’s innovations range further and wider than those of the cloud. Aggressive challengers are gaining attention and funding that could put them in direct competition with today’s most valuable companies. While the leaders that emerged in the cloud era played mostly at the application layer, the AI era will see fierce competition at many levels, including infrastructure, models, and devices.

Early winners in the AI era

The most valuable tech companies have emerged as early winners in the AI era, further concentrating value at the top. The five biggest companies account for more than 70% of the total market value of the top 20, up from 65% last year. Nvidia’s market cap is up more than 800% since January 2023, and Microsoft, Amazon, Alphabet, Apple, and Meta are all valued above $2 trillion. The hyperscalers are investing heavily in AI infrastructure, talent, models, and applications to protect their positions (see Figure 2).

At the same time, a new set of winners is emerging. Privately owned OpenAI is valued at around $300 billion, which would place it among the top 15 companies if it were public. Anthropic is valued at more than $60 billion. Other AI companies, including Glean, Anysphere, Mistral, and Figure, also have huge valuations, ranging from $5 billion to nearly $40 billion. According to CB Insights, there were about 20 times more tech unicorns (start-ups valued at more than $1 billion) added in 2024 compared with 2014.

More layers of competition

Tech leaders can monetize their investments in a range of ways because they’re competing at every level—owning the infrastructure, building their own models (for example, Google’s Gemini or Amazon’s Nova), defining platforms, and capturing disproportionate value at the application layer.

But in the age of AI, that dynamic may be shifting, because new players are encroaching on the leaders at every layer of the AI stack.

• Infrastructure. Start-ups like Coreweave offer specialized, high-performance GPU-as-a-service infrastructure optimized for AI and GPU-intensive workloads, often at lower latency and cost than the traditional cloud computing services. Hardware incumbents such as Nvidia are building AI factories—specialized, high-performance data centers built for the demands of the AI era—to strengthen their position, and governments are pushing for sovereign AI capabilities by investing in domestic infrastructure.
• Models. New players such as OpenAI, Anthropic, and Mistral have quickly gained ground, in many cases with early investment from the hyperscalers themselves. These start-ups are proving that foundation model innovation isn’t limited to big tech.
• Applications will still be where we expect to see the most new value and potential disrupters. For example, Anysphere, which was founded in 2022 and is currently valued at $9 billion, has rapidly gained traction among developers with its AI-powered code editor, Cursor—reinforcing how being best in class can still win against the large tech firms’ products. 

In addition to these layers, insurgents are competing with tech leaders in new areas: 

• Devices. AI phones could shake up the established smartphone landscape. Consider the potential impact of a Gemini-enabled Android phone or a device resulting from the collaboration of OpenAI and Jony Ive.
• Search. Chatbots like ChatGPT, Claude, or Perplexity AI are already starting to displace search as the entry point to the Internet.
• Browsers. AI-based browsers like the ones developed by Perplexity and OpenAI could reignite the browser wars of the 1990s.

Each of these control points provides the incumbents with a wealth of data to improve their offerings, and they may need to self-disrupt as AI changes the playing field. But they’ll need to move rapidly to compete: The newcomers are more agile and cost efficient, allowing them to move quickly. Mistral, for example, which is valued at more than $6 billion and has fewer than 500 employees, can innovate and iterate quickly with its light hierarchy.

Uncertainties shaping the AI market

Beyond direct competition, multiple dynamics are unfolding, adding significant uncertainty to the environment.

• Agentic AI. These systems can perform complex workflows, make decisions without human prompts, and adapt dynamically, which could disrupt traditional software paradigms. Legacy players in the application layer (for example, enterprise SaaS) may find their models disrupted by competitors embedding agentic AI that delivers end-to-end outcomes. (For more, read “Will Agentic AI Disrupt SaaS?”)
• US-China relations. Geopolitical tensions are fracturing global technology supply chains, particularly in semiconductors and AI hardware. Export controls, investment restrictions, and sanctions are leading tech companies to reconfigure global strategies and confront uncertain access to key markets. As China’s firms accelerate domestic alternatives and US firms shift manufacturing, the resulting decoupling could reshuffle global tech leadership, with regional champions replacing global incumbents.
• Regulatory pressure. Governments are ramping up scrutiny on data privacy violations and AI safety at major tech firms. Many are pushing for their own sovereign AI to limit dependency on the US-based leaders, with some hoping to develop their own national champions.
• Quantum computing. Quantum represents a foundational shift in computation, threatening to make classical encryption obsolete and redefine problem-solving in materials science, logistics, and AI. As governments and companies race to develop quantum advantage, the first movers could leapfrog current tech giants in sectors from cloud to cybersecurity. The uncertainty around when scalable quantum breakthroughs will occur leaves incumbents exposed to disruption from start-ups or state-backed programs with early breakthroughs.

What does this mean for technology leaders? 

• Incumbent tech leaders. Keep doing what you have been doing: Disrupt, innovate, attract talent, and acquire and partner for new capabilities. There is more competition at every layer (models, devices, browsers, GPU-as-a-service), and there are also more opportunities to scale.
• Legacy technology. Embrace and extend. Act quickly—start by cutting costs. Monitor the horizon and be willing to disrupt your business. Invest in innovation while enhancing capabilities through acquisitions and partnerships. Understand your customers’ needs and make the most of those valuable relationships.
• Disrupters and start-ups. Understand the scale of investment required to compete with the hyperscalers. Talent is scarce, so develop a strategy to acquire and retain the right people. Identify new ways to better serve your customers’ needs. Disruption brings opportunity to reshape the basis of competition.

The technology industry has been riding this wave of disruption since OpenAI released its first chatbot. Other industries have been slower to adopt, but AI’s disruption is likely to extend well beyond tech companies. Across sectors, early movers will have an advantage.