Why Pure-Software AI Startups Are Structurally Doomed

The Two Moats What Survives When Intelligence Becomes Cheap The Premise As foundation models become more intelligent, the cost of intelligence approaches zero, and downstream players — companies building software products on top of foundation models — face a dual squeeze: Foundation models absorb more of the value stack with each generation LLMs that are good at coding can cheaply replicate any pure-software innovation What survives this dual squeeze? The thesis is that only...