On January 20, 2023, a16z, a leading Silicon Valley venture capital firm, published a comprehensive report on AI applications, addressing the crucial question of “Where are the real moats for AI applications?” The report outlines three pivotal themes:
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Software Replaces Labor: Traditional SaaS models are being upended as AI applications take on roles previously held by humans, transforming cost structures. For instance, companies like Salient leverage AI to replace costly debt collectors, recovering 50% more debts effortlessly.
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AI-Native Transformation: Existing software giants, such as Workday, are leveraging AI to enhance their entrenched systems, making them difficult to challenge directly. Entrepreneurs are advised to find fresh markets rather than compete head-on with these behemoths.
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Proprietary Data as a Walled Garden: As AI models become commoditized, businesses that harness exclusive data gain competitive advantages, exemplified by firms like Open Evidence in specialized sectors.
The report emphasizes the AI era’s transformative potential for businesses, urging innovators to create efficiencies and explore untapped markets.
