Favored companies get access to frontier models, which gives them a competitive advantage, starving out smaller companies. Any smaller companies that do manage to innovate ultimately get acquired by the favored companies since they are worth more with access to frontier models than without (which is effectively a discount on the purchase price of those companies).

I'm not saying that's going to happen, but it is one possible scenario that, over time, would be disastrous for innovation and freedom.

Foreseeable corruption by the state. A further slip into cronyism. A large puzzle piece that when simply connected with the recent actions like demanding shares in companies, removing funding for energy projects not aligned with other lobbies, pardoning of white collar criminals. It seems pretty plain and obvious the type of disasters that await.