A Fed official is asking whether AI is becoming 'too big to fail'

Anthropic? absolutely. But there is a strong Jevons paradox component.

OpenAI, Google, or SpaceX have a moat of hardware and energy. If AI is 100x cheaper orgs will use 100x more AI and the benefit of algorithmic improvements will flow to whoever has the hardware to run it.

I don't think consolidation is the issue here, so anti-trust doesn't make a lot of sense. There are at least five major US companies strongly competing with each other. The issue is that total investment has gone far beyond expected revenue because no one is far ahead, everyone is bidding against each other for chips/power, and competition is driving down token price. Ironically, consolidation would fix this because a single winner would be able to charge monopoly prices. Anti-anti-trust. :-)

Who is to be broken up? How? Into what entities?

Merely being big and doing deals is not enough for antitrust, which requires a consolidation of power and control, not merely economic decisions that could have negative side effects.

The AI industry is very big, with many actors beyond the frontier labs. There's nothing for antitrust to latch onto, except for maybe NVIDIA's deals.