I think this is a bit of a rhetorical miss, Matt. You're not wrong about anti-big v. pro-competition, but I think you're missing that bigness has an anti-competitiveness all of its own, and you just kind of hand-waved away Amazon's sins against competition because you wanted to whine about Neo-Brandeisians - which, okay, whether it's them or deranged activists, that sort of whining/dunking is always kind of fun, but it doesn't excuse hand-waving.
I think your fundamental mistake is not separating "big" from "broad". Amazon is big AND broad. As you say, it has an e-commerce platform, a cloud computing platform, a grocery chain, and several other business units that allow it to experiment with supermarket innovation. But that particular bundle of business units is primarily characterized by broadness, not bigness.
Now, it's true that broadness and bigness are rather correlated, particularly in tech, since it takes less to dominate an entire sector. A garage startup, let alone any old mid-sized tech firm with a few hundred to thousands of employees, couldn't ever hope to achieve the broadness necessary to innovate in groceries. The former is neither big nor broad, and though the latter does approach the level of bigness necessary to have an anti-competitive grip on its sector - the Ubers and Squares of the world - it's not big enough to be broad.
But we can easily imagine a firm somewhat smaller than Amazon (let's call it "Mississippi") - perhaps $40B in revenue rather than $400B - that nevertheless could cobble together a reasonable facsimile of the prerequisite Amazon Bundle to innovate on groceries. Even missing the critical web infrastructure Amazon has, we can imagine Mississippi having put the rest together almost a decade ago, and, having beaten Amazon to the punch of supermarket innovation, would now be poised to prove the concept just like Amazon is doing, while being reliant on AWS or a competitor for their web infrastructure. We can go even further to imagine a firm somewhere between Mississippi and Uber/Square (call it "Orinoco"), which maybe has some parts of the Mississippi Bundle in-house, and whose leadership are perfectly capable of negotiating with similar-sized or Uber/Square-sized suppliers to secure partnerships on the critical elements of the Bundle for innovating supermarkets.
The key takeaway is that these companies are much less big, but still perfectly capable of conceiving and executing the same plan Amazon has. After all, the reason why Amazon is innovating and not the predominantly-regional supermarket chains, is that existing supermarket chains are not broad enough to conceive or execute innovation, despite being just as big as Mississippi or Orinoco - one of the largest, Publix, for example, has $40B in revenue! It's just too risky for Publix without being broad, even though Orinoco is in fact *less* big than Publix.
Moreover, we can pretty reasonably extrapolate that in an economy filled with similarly "less big" companies like Mississippi and Orinoco, instead of dominated by Amazons, the costs of cobbling together such a bundle might actually be less, since there'd be more competition in the economy.
At the end of the day, I think this proves that we shouldn't get hung up on bigness as the prerequisite to the kind of cross-sector innovation we want Amazon to do. And in fact, historically, bigness and broadness haven't really been critical prereqs to innovation, let alone cross-sector innovation. They just make it easier. But at least within the context of what we want Amazon to do, sure, the bigness helps them absorb risk, but the broadness is really the secret sauce. Anyone else can absorb risk just as well - if anything, Amazon's success is a direct product of Bezos' high risk tolerance at every size it's been, not evidence that bigness is inherently necessary for absorbing risk.
1. Wolf Warriors have nothing to do with size ("supergiant"), they have to do with changing culture. It's a correction from Deng's quieter style, when China was just as "supergiant" a country as it had always been, just less aggressive and self-assured. I think it's far more clear that concern for "international appeal" isn't the driving reason behind Xi's aggression. Rather, Xi wanted to consolidate the CCP's grip over China's growing economic power. It's nothing new that an autocrat would resort to nationalism to consolidate power; that's straight out of Machiavelli. What's unique is that in the context of returning to economic relevance on the world stage, the Chinese felt like they could veer towards the adventurist side of the isolationism they're historically known for. Adventurism + authoritarianism-fueled-nationalism = jingoism --> Wolf Warriors. QED.
2. The US really needs to be thinking grander than semiconductors, and I say this as someone who works in the semiconductor industry and has every reason to cheer on the billions in investments that are surely headed toward my company one way or another.
IMO, One Billion Americans is the only strategy I've ever seen that even *attempts* to honestly recognize and address the sheer scale of the problem posed by Cold War II. We're definitely NOT going to win CWII on a handful of extra semiconductor fabs alone.
To clarify a point… Publix *could* afford to innovate by building a test store. They build stores all the time! But in order to actually innovate, they’d have to develop that broad set of competencies in the Amazon Bundle. *That’s* the expensive part, the part Publix can’t afford, because the flip side to the First Mover Advantage is the First Failer Disadvantage - if you’re the one to fail first, your competition gets to learn from your mistakes, while you get to sit there with a multimillion dollar hole in your bank account.
To clarify a point… Publix *could* afford to innovate by building a test store. They build stores all the time! But in order to actually innovate, they’d have to develop that broad set of competencies in the Amazon Bundle. *That’s* the expensive part, the part Publix can’t afford, because the flip side to the First Mover Advantage is the First Failer Disadvantage - if you’re the one to fail first, your competition gets to learn from your mistakes, while you get to sit there with a multimillion dollar hole in your bank account.