It's great to see the foundation model companies having their product offerings commoditized so fast - we as the users definitely win. Unless you're applying to be an intern analyst of some type somewhere... good luck in the next few years.
I'm just starting to wonder where we as the entrepreneurs end up fitting in.
Every majorly useful app on top of LLMs has been done or is being done by the model companies:
- RAG and custom data apps were hot, well now we see file upload and understanding features from OAI and everyone else. Not to mention longer context lengths.
- Vision Language Models: nobody really has the resources to compete with the model companies, they'll gladly take ideas from the next hot open source library and throw their huge datasets and GPU farm at it, to keep improving GPT-4o etc.
- Deep Research: imo this one always seemed a bit more trivial, so not surprised to see many companies, even smaller ones, offering it for free.
- Agents, Browser Use, Computer Use: the next frontier, I don't see any startups getting ahead of Anthropic and OAI on this, which is scary because this is the 'remote coworker' stage of AI. Similar story to Vision LMs, they'll gladly gobble up the best ideas and use their existing resources to leap ahead of anyone smaller.
Serious question, can anyone point to a recent YC vertical AI SaaS company that's not on the chopping block once the model companies turn their direction to it, or the models themselves just become good enough to out-do the narrow application engineering?
This is tricky as I think it is uncertain. Right now the answer is user experience, customs workflows layered on top of the models and onboarding specific enterprises to use it.
If suddenly agentic stuff works really well... Then that breaks that world. I think there's a chance it won't though. I suspect it needs a substantial innovation, although bitter lesson indicates it just needs the right training data.
Anyway, if agents stay coherent, my startup not being needed any more would be the last of my worries. That puts us in singularity territory. If that doesn't cause huge other consequences, the answer is higher level businesses - so companies that make entire supply chains using AI to make each company in that chain. Much grander stuff.
But realistically at this point we are in the graphic novel 8 Billion Genies.
I'm just starting to wonder where we as the entrepreneurs end up fitting in.
Every majorly useful app on top of LLMs has been done or is being done by the model companies:
- RAG and custom data apps were hot, well now we see file upload and understanding features from OAI and everyone else. Not to mention longer context lengths.
- Vision Language Models: nobody really has the resources to compete with the model companies, they'll gladly take ideas from the next hot open source library and throw their huge datasets and GPU farm at it, to keep improving GPT-4o etc.
- Deep Research: imo this one always seemed a bit more trivial, so not surprised to see many companies, even smaller ones, offering it for free.
- Agents, Browser Use, Computer Use: the next frontier, I don't see any startups getting ahead of Anthropic and OAI on this, which is scary because this is the 'remote coworker' stage of AI. Similar story to Vision LMs, they'll gladly gobble up the best ideas and use their existing resources to leap ahead of anyone smaller.
Serious question, can anyone point to a recent YC vertical AI SaaS company that's not on the chopping block once the model companies turn their direction to it, or the models themselves just become good enough to out-do the narrow application engineering?
See e.g. https://lukaspetersson.com/blog/2025/bitter-vertical/