The emergent behavior from this however is not that we get healthy competition, it's that the big guys have the money, connections, and understanding of the process to still do everything they want, while the little guys can't get off the ground and compete.

This is a necessary evil in the case of an industry like aviation where there's a massive and immediate risk to human life if you get it wrong.

If you see AGI as life threatening (in a physical sense) it's an understandable stance to take. However if AGI is threatening moreso in a social sense I don't think concentrating the power behind it is going to be a societal good.

I genuinely believe we as a society will get fucked by corporations for everything we can give if we don't either radically socially reform for incoming AGI, or have competitive open developments in the area not beholden to corporate interests.

For my money, the latter seems at least possible.

I don't know, power concentrates plenty in unregulated industries. Google has owned search for over two decades, and it's not like there's a ton of government regulation preventing anyone from starting a search engine. pPople have tried, they just haven't succeeded because Google was that much better and that much farther ahead, and they used their advantages to widen the gap. The same is true for advertising, it's not like the government was stopping anyone from competing with Google and Facebook, but other companies just couldn't get there.

I'm not sure that AI is going to look that different. Is there any reason to believe that if OpenAI wins the majority share, that any competition is going to be able to dethrone them?

We could imagine a world where the US government broke up big tech companies in the late 2000s or early 2010s, and it sure seems like that world would be in a much better position today, due exactly to increased competition. Instead we have a bunch of big companies that don't take risks or release ambitious new products because they're too busy trying to defend their moats.

Define AI. Companies tend to find loopholes and the government is slow to regulate.

Broad enough laws don't have loopholes. GDPR for example had the wisdom not to define specific types of personal information (such as name, or IP address) but instead any data that could be correlated to identify a person. That puts the ball in the corporations' court to make sure they stay well clear of the dividing line.

Delegated councils (like the FDA, FTC, FCC, etc.) and courts can be used to make decisions about edge and individual cases, and do so much closer to real time than Congress can act.

Governments regularly successfully define things much more vague than "is this AI?"