The Sequence Opinion - Issue 926: AI Moats in the Age of Scaling Laws

TheSequence · 1 month ago · 25

The Sequence Opinion argues that as AI capability becomes more reproducible, the economic “moat” of being first erodes and gets replaced by more fluid advantages like smaller models, routing, and distillation. It cites “six months” later when another lab matches similar capability and an open model delivers most of it “at a fraction of the price.” The takeaway is that durable value shifts from costly, first-mover training to barriers that aren’t easily replicated by predictable scaling and accessible tooling.