Pluralistic: Why aren't AI companies competing directly with their customers? (13 Jul 2026)
9 hours ago
- AI companies avoid competing with their customers by selling tools ("picks and shovels") instead of directly providing services, despite claims of superior AI capabilities.
- The 'go meta' economy prioritizes abstraction layers over real work, allowing companies to profit indirectly rather than directly competing.
- If AI chatbots could truly replace workers, companies would benefit more by offering services themselves (e.g., opening hospitals) rather than selling to existing businesses.
- The gold rush truism that pick-and-shovel sellers profit most is challenged by the even greater profitability of wholesaling to those retailers.
- Cory Doctorow highlights this paradox using Omar Khayyám's quote: 'What do the Vintners buy / One half so precious as the Goods they sell?'