You could have a society where there's one single spreadsheet package made by a team of 20 people, a few operating systems, a new set of 50 video games every year (with graphics that are good enough but nothing groundbreaking so they'll run on old hardware) created according to quota by state-run enterprises, Soviet style.

This would be very efficient in avoiding duplication, the entire industry would probably only need a few thousand developers. It would also save material resources and energy. But I think that even if the software these companies produced was entirely reliable and bug-free it it would still be massively outcompeted by the flashy trend-chasing free-market companies which produce a ton of duplicated outputs (Monday.com, Trello, Notion, Asana, Basecamp - all these do basically the same thing).

It's the same with AI, or any other trend like tablets, the internet, smartphones - people wanted these and companies put their money into jumping aboard. If ChatGPT really was entirely useless and had <10,000 users then it would be business as usual - but execs can see how massive the demand is. Of course plenty are going to mess it up and probably go broke, but sometimes jumping on trends is the right move if you want a sustainable business in the future. Sears and Blockbuster could've perfected their traditional business models and customer experience without getting on the internet, and they would have still gone broke as customers moved there.