The notion of building a business as a 'thin wrapper' around a foundational model like GPT is flawed. Truly defensible AI products, like Cursor, build numerous specific, fine-tuned models to deeply understand a user's domain. This creates a data and performance moat that a generic model cannot easily replicate, much like Salesforce was more than just a 'thin wrapper' on a database.

Instead of simply adding AI features, treat your AI as the product's most important user. Your unique data, content, and existing functionalities are "superpowers" that differentiate your AI from generic models, creating a durable competitive advantage. This leverages proprietary assets.

AI capabilities offer strong differentiation against human alternatives. However, this is not a sustainable moat against competitors who can use the same AI models. Lasting defensibility still comes from traditional moats like workflow integration and network effects.

The enduring moat in the AI stack lies in what is hardest to replicate. Since building foundation models is significantly more difficult than building applications on top of them, the model layer is inherently more defensible and will naturally capture more value over time.

Unlike consumer chatbots, AlphaSense's AI is designed for verification in high-stakes environments. The UI makes it easy to see the source documents for every claim in a generated summary. This focus on traceable citations is crucial for building the user confidence required for multi-billion dollar decisions.

CEO Aravind Srinivas grew up in a culture in Chennai, India, that valued being 'scholarly and well-read' even more than being rich. This deep-seated respect for knowledge became the core driver behind his mission to build Perplexity and democratize access to information.

Perplexity's CEO argues that building foundational models is not necessary for success. By focusing on the end-to-end consumer experience and leveraging increasingly commoditized models, startups can build a highly valuable business without needing billions in funding for model training.

If a company and its competitor both ask a generic LLM for strategy, they'll get the same answer, erasing any edge. The only way to generate unique, defensible strategies is by building evolving models trained on a company's own private data.

The concept of "sovereignty" is evolving from data location to model ownership. A company's ultimate competitive moat will be its proprietary foundation model, which embeds tacit knowledge and institutional memory, making the firm more efficient than the open market.