Just because it matters doesn’t mean it’s defensible or profitable

Denis Bolkovskis

Anthropic

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Most AI startups, especially those formed from post-ChatGPT hype, are doomed due to lack of defensibility and differentiation. Gluing together AI APIs and building UIs without real moats leads to little value for investors. Even Alphabet, Meta, and OpenAI have no defensibility in the AI space. However, startups that rely on monstrous compute requirements or operate in domains with real-world, proprietary data may have value and potential longevity.

Most AI startups are doomed

If you built it over a weekend, so can someone else

Not even Alphabet, Meta, or OpenAI have any defensibility

But what if I have the best version of an AI?

Value created doesn’t mean value captured

most startups are doomed whichever business they choose to enter :) including AI

I share <a href="https://app.daily.dev/yaireo" data-mention-id="j0aX3yy9bDkDJDShHMXar" data-mention-username="yaireo">@yaireo</a>’s sentiments, I just also wanted to point out that this is how every fad’s startup ecosystem works. How many semiconductor companies did we have 60 years ago vs. today? Now the field is dominated by like 4 companies (6 if you want to include fabless I guess).
Same with web companies, specifically ecommerce. The dotcom bubble burst killed a bunch of ecommerce companies and now we have Amazon, Walmart, and eBay dominating the space. Maybe Facebook if you want to count Marketplace.
Point is, every fad allows a bunch of startups to build a house of cards (a company without any revenue model or even useful product) and the moment people figure it out, that’s it.
AI is no exception