AIWhat counts as a business moat in the age of AI?
A newsletter argues that AI is eroding patents, proprietary code and switching costs, leaving rapid reinvention, access to capital and luxury brands’ status value as more durable advantages.
TLDR
The newsletter’s author describes a friend’s business supplying training data to OpenAI whose revenue fell from $160 million to $50 million, using it to illustrate the fragility of competitive advantages. The essay argues that companies should prioritize faster reinvention over static defenses such as patents and code. It also identifies the ability to finance vast computing investments and the status conveyed by luxury brands as remaining advantages. Its central caveat: even if AI drives enormous economic growth, the pioneering companies may not be the ones that capture the gains.
What counts as a business moat in the age of AI?
A newsletter argues that AI is eroding patents, proprietary code and switching costs, leaving rapid reinvention, access to capital and luxury brands’ status value as more durable advantages.
TLDR
The newsletter’s author describes a friend’s business supplying training data to OpenAI whose revenue fell from $160 million to $50 million, using it to illustrate the fragility of competitive advantages. The essay argues that companies should prioritize faster reinvention over static defenses such as patents and code. It also identifies the ability to finance vast computing investments and the status conveyed by luxury brands as remaining advantages. Its central caveat: even if AI drives enormous economic growth, the pioneering companies may not be the ones that capture the gains.