We study whether common ownership affects the direction of technological change. We develop a task-based model with multiple local labor markets in which commonly owned firms internalize wage externalities from portfolio rivals when hiring from the same labor pool, increasing incentives to automate. We establish causality by exploiting institutional investor mergers in a dynamic DiD design, using U.S. data on institutional ownership, establishment level employment, and text-classified automation patents. Increases in common ownership among local labor-market rivals raise firms’ automation propensity by 22.7 percentage points and reduce employment growth. The effect disappears when firms do not compete within labor markets.

We characterize AI automation as a continuum between crashing waves, in which capabilities jump abruptly across narrow task sets, and rising tides, in which capabilities improve continuously and broadly. Using evidence from more than 6,000 text-based, LLM-addressable tasks derived from the U.S. Department of Labor’s O*NET taxonomy and over 60,000 evaluations by experienced workers, we find little evidence of crashing waves (contrary to existing views). Instead, rising tides are the primary form of AI progress. AI performance is high and improving rapidly across many tasks. In 2024-Q2, models completed text-based tasks that take humans about 1.5 hours to complete with roughly 60% success, rising above 70% by 2025-Q3. If recent trends in AI capability growth persist, frontier LLMs will be able to complete most text-based tasks at minimally sufficient quality with 88%–97% success by 2030

Competition between firms to invent and patent an idea, or "patent racing," has been much discussed in theory, but seldom analyzed empirically. This article introduces an empirical way to identify patent races, and provides the first broad-based view of them in the real world. It reveals that patent races are common, particularly in information-technology fields. The analysis is then extended to get the causal impact of winning a patent race, using a regression-discontinuity approach. It shows that patent race winners do significantly more follow-on innovation, and the follow-on research that they do is more similar to what was covered by the patent.