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AI Founder's Bitter Lesson. Chapter 2 – No Power
Vertical AI products will lose market share to horizontal AI competitors unless protected by cornered resources.
AI history teaches us a clear pattern: solutions that try to overcome model limitations through domain knowledge eventually lose to more general approaches that leverage compute power. The closest thing we have today to the horizontal AI product we are dealing with is Claude Computer-use, which is very expensive to run because of repeated calls to big LLM models with high resolution images. We’ll make concrete predictions and investigate the potential obstacles to this transition - including model stagnation, regulatory challenges, trust issues, and economic barriers.
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