AI's biggest enterprise impact isn't just automation but a complete replatforming of software. It enables a central "context engine" that understands all company data and processes, then generates dynamic user interfaces on demand. This architecture will eventually make many layers of the traditional enterprise software stack obsolete.

As AI model performance converges, the key differentiator will become memory. The accumulated context and personal data a model has on a user creates a high switching cost, making it too painful to move to a competitor even for temporarily superior features.

Effective enterprise AI needs a contextual layer—an 'InstaBrain'—that codifies tribal knowledge. Critically, this memory must be editable, allowing the system to prune old context and prioritize new directives, just as a human team would shift focus from revenue growth one quarter to margin protection the next.

Marc Benioff asserts that the true value in enterprise AI comes from grounding LLMs in a company's specific data. The success of tools like Slackbot isn't from a clever prompt, but from its access to the user's private context (messages, files, history), which commodity models on the public web lack, creating a defensible moat.

Legal AI startup Sandstone's approach shows that the model is a commodity. Real defensibility comes from creating a "context layer" that integrates data from CRM, CLM, and communications, giving the AI the business context required to be truly useful for in-house teams.

The effectiveness of enterprise AI agents is limited not by data access, but by the absence of context for *why* decisions were made. 'Context graphs' aim to solve this by capturing 'decision traces'—exceptions, precedents, and overrides that currently live in Slack threads and employee's heads, creating a true source of truth for automation.

As AI and better tools commoditize software creation, traditional technology moats are shrinking. The new defensible advantages are forms of liquidity: aggregated data, marketplace activity, or social interactions. These network effects are harder for competitors to replicate than code or features.

AI agents are simply 'context and actions.' To prevent hallucination and failure, they must be grounded in rich context. This is best provided by a knowledge graph built from the unique data and metadata collected across a platform, creating a powerful, defensible moat.

Capturing the critical 'why' behind decisions for a context graph cannot be done after the fact by analyzing data. Companies must be directly in the flow of work where decisions are made to build this defensible data layer, giving workflow-native tools a structural advantage over external data aggregators.