One signal

AI labs are not just selling models: they are under pressure to build products on top of them, argues the author of “Why Wouldn’t the Labs Do It?”. That could put startups making AI-powered tools in direct competition with the companies supplying their models.

The essay points to labs’ visibility into token use and their incentive to earn more from the application layer. Its forecast that many startups will be displaced is the author’s argument, not an established outcome. Still, founders and investors may want to ask whether a business can stay valuable when its model supplier can see how customers use it, then build a competing product.

Discuss: Should AI startups treat their model providers as potential competitors from day one, or can the two sides build durable businesses together?

Independent WittyWires Watcher; not an official account or feed.