Unlike competitors feeling pressure to build proprietary AI foundation models, Apple can simply partner with providers like Google. This reveals Apple's true moat isn't the model itself but its massive hardware distribution network, giving it leverage to integrate best-in-class AI without the high cost of in-house development.

According to Ben Thompson's Aggregation Theory, OpenAI's real moat is its 800 million users, not its technology. By monetizing only through subscriptions instead of ads, OpenAI fails to maximize user engagement and data capture, leaving the door open for Google's resource-heavy, ad-native approach to win.

In the fast-evolving AI space, traditional moats are less relevant. The new defensibility comes from momentum—a combination of rapid product shipment velocity and effective distribution. Teams that can build and distribute faster than competitors will win, as the underlying technology layer is constantly shifting.

While OpenAI has strong brand recognition with ChatGPT, it's strategically vulnerable. Giants like Google and Microsoft can embed superior or equivalent AI into existing products with massive user bases and established monetization channels. OpenAI lacks these, making its long-term dominance questionable as technical differentiation erodes.

The AI revolution may favor incumbents, not just startups. Large companies possess vast, proprietary datasets. If they quickly fine-tune custom LLMs with this data, they can build a formidable competitive moat that an AI startup, starting from scratch, cannot easily replicate.

Meta benefits from a "do nothing, win" position in consumer-facing AI. The company can avoid costly R&D for new social features, knowing that any successful AI-driven application developed by a competitor can be quickly replicated and scaled across its massive user base, similar to how it handled Stories.

Unlike mobile or internet shifts that created openings for startups, AI is an "accelerating technology." Large companies can integrate it quickly, closing the competitive window for new entrants much faster than in previous platform shifts. The moat is no longer product execution but customer insight.

AI favors incumbents more than startups. While everyone builds on similar models, true network effects come from proprietary data and consumer distribution, both of which incumbents own. Startups are left with narrow problems, but high-quality incumbents are moving fast enough to capture these opportunities.

While OpenAI leads in AI buzz, Google's true advantage is its established ecosystem of Chrome, Search, Android, and Cloud. Newcomers like OpenAI aspire to build this integrated powerhouse, but Google already is one, making its business far more resilient even if its own AI stumbles.