Capitalists are motivated to innovate if there's undistorted competition. If they don't they will lose new markets. For exemple Microsoft and IBM failed to build the start of general public web search and Google won. More recently, Google failed the race to release the first general public LLM, OpenAI backed by Microsoft did.
There are probably as many examples of this as there are of companies ruining innovation for stupid reasons.
Though, what better system that a regulated "free" market do we have successfully tested? A bunch of political leaders deciding alone of what the companies should do? How does that prevent irrational decision that stops innovation? How do you prevent them from just doing whatever benefits them as seen in many authoritarian regimes that were supposedly socialist?