The Vatican’s “AI Monopolies” Talk Risks Encouraging Bad Tech Policy

Earlier this week, His Holiness Pope Leo XIV issued his much-anticipated encyclical Magnifica Humanitas, which lays out the Pontiff’s position on a wide range of issues related to the rise of artificial intelligence (AI) from the perspective of the Catholic social thought tradition. In so doing, Magnifica Humanitas raises a number of complex and important questions that encompass not just the technological, theological, and moral spheres, but also politics, law, and economics—including the extent to which it is “necessary to establish adequate regulatory tools capable of upholding justice and curbing the distorting effects of technological power” in the age of AI. But the encyclical’s discourse surrounding concentrated technological power risks reinforcing calls for heavy-handed AI regulation that are difficult to justify given the competitive and fast-moving nature of today’s AI market.

Magnifica Humanitas speaks of “the new monopolies of AI” and “major economic and technological actors that exercise de facto power over the conditions of everyday life,” calling for the “freeing technology from monopolistic control.” Of course, from a technical antitrust perspective, it is very difficult to identify any AI monopolies whatsoever: at the model level, entrants like OpenAI, Anthropic, and DeepSeek thrive even without the troves of proprietary data enjoyed by the large digital incumbents like Google, Meta, and Alibaba with whom they compete. At the resource-intensive cloud computing level, robust competition nonetheless exists not just between Amazon, Google, and Microsoft, but also among IBM, Oracle, and other players. And, while Nvidia’s revolutionary AI chips have unsurprisingly given the company an edge, firms like Amazon and AMD are poised to compete.

Even in cases where AI firms may enjoy some market power, that’s not necessarily a bad thing. Rather, concentration is also driven by economies of scale—such as in cloud—and the need for firms to recoup large R&D investments in new technologies—especially at the chip level. Indeed, of the many rich teachings in the Catholic social thought tradition, “big is bad” would not at all seem to be one of them. To be sure, Magnifica Humanitas argues that with respect to “companies and platforms that define conditions for access, rules of visibility, forms of interaction, and even economic opportunities,” the “principle of subsidiarity requires that such processes not be imposed from above in an opaque and unilateral manner, instead be directed toward the common good.” However, this is hardly a condemnation of size in and of itself, but rather a statement that business conduct should accord with the rule of law, the common good, and other relevant social norms.

Rejecting the notion that big is bad is perfectly consistent with prior papal encyclicals that dealt extensively with political economy. Earlier Catholic social teaching, including Quadragesimo Anno, criticized abuses of concentrated financial power, but it did not treat firm size itself as inherently illegitimate or incompatible with the common good. In fact, it broadly praised corporatist models of political economy where firms enjoy “a certain monopoly privilege” and also work to “maintain the rights…of works or employers” consistent with the common good. (Indeed, larger firms often generate productivity and wage gains that smaller competitors struggle to match.)

Moreover, not only is big not bad, but private ordering is generally far more consistent with the principle of subsidiarity than regulation. As Pope John Paul II made clear in Centesimus Annus, it is not the role of the state to supplant markets with “State control,” but rather to create “favourable conditions for the free exercise of economic activity, which will lead to abundant opportunities for employment and sources of wealth.” Indeed, the Church’s traditional application of the subsidiarity principle has been to limit state, not private, power. As Magnifica Humanitas itself points out, the principle of subsidiarity implies “that neither the individual nor the family should be subsumed by the State, but should be allowed to act freely.”

As such, the encyclical’s suggestion that “regulations and protections” for AI should be developed at the “the international level” is curious. Although as Pope Pius XII proclaimed decades ago that “an effective political world organization…is in line with the traditional doctrine of the Church,” the principles of subsidiarity dictate that, as Magnifica Humanitas confirms, “whatever can be carried out by individuals, families, intermediary organizations and local communities should not be carried out by higher-level authorities,” such as global institutions like the United Nations. But what reason is there to believe that markets governed by law or tailored national regulations will be insufficient to protect the common good in the age of AI?

The answer provided by Magnifica Humanitas appears to be that neither private ordering nor light-touch national regulations will suffice to ensure proper AI governance. The text states, “More than ever, in the age of AI and robotics, it is no longer possible to rely solely on the ‘invisible hand’ of the market.” Moreover, the encyclical seems to endorse the idea that national governments may be captured by large tech firms and thus be unreliable regulators, arguing that “regulatory influence remain[s] in the hands of a few.” But regardless of whether such claims are true, it is far too soon to know how things will play out. Indeed, in this sense the posture of Magnifica Humanitas differs substantially from that of earlier encyclicals like the magisterial Rerum Novarum, which responded to over a century of major industrial developments.

Magnifica Humanitas is, without question, an exceptionally thoughtful contribution to ongoing debates about AI, morality, and human flourishing. At its core, the encyclical gets the fundamental question right: “Technology in and of itself is not a solution to humanity’s problems, just as it is not inherently evil,” but rather a tool whose value depends on the ends it serves and the moral vision that guides its use. As AI continues to evolve, Catholic social thought will undoubtedly evolve alongside it. But policymakers should resist treating that moral framework as a justification for premature AI regulation or anti-bigness policies. Today’s AI markets remain dynamic and highly competitive across models, cloud infrastructure, and hardware, with new entrants regularly challenging established firms. Nor is it clear that centralized international governance would better serve the common good than markets governed by law and national democratic institutions. The Church’s own tradition of subsidiarity suggests caution before concentrating authority at higher levels absent clear evidence that individuals, markets, and local institutions are incapable of addressing these challenges themselves.