More or Less Apple, OpenAI & Why Nobody Makes Money in AI | The SaaS Apocalypse
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Feb 27, 2026 They debate whether abundant AI will commoditize intelligence or spark a Cambrian explosion of creators. Fundraising woes and VC caution at Upfront Summit set a tense backdrop. They argue which AI businesses can build durable moats and warn about rapid cloning and margin collapse. Tangents include whether Stripe should buy PayPal, OpenAI hardware rumors, and Gen Z’s surprising iPod revival.
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Abundant AI Will Collapse Software Margins
- Sam Lessin argues abundant machine intelligence will commoditize software, collapsing margins toward the cost of energy.
- He warns that when intelligence is cheap and ubiquitous, being ‘good at software’ ceases to be a sustainable moat for businesses.
Software Alone Is No Longer A Durable Moat
- Sam reframes what will remain valuable: not software itself but scarce compounding assets like marketplaces, trust, and unique data.
- He argues businesses must build durable, non-replicable advantages rather than rely on software hardness.
Build Compounding Assets Not Just Software
- Do focus on building compounding, hard-to-replicate assets (data, trust, marketplaces) instead of depending on software scarcity.
- Sam recommends using software as an on-ramp to those assets, then monetizing the persistent advantage.