Over the past 18 months, we’ve seen an explosion of “AI startups.”
But after auditing 47 early-stage AI SaaS products, here’s what stood out:
72% were thin wrappers around GPT or Claude APIs
64% had no proprietary data
81% had no defensible moat
Most had <6 months runway at current burn
The uncomfortable reality:
We’re in an “AI veneer” cycle, not an infrastructure cycle.
The majority of products:
Call an API
Add UI
Add billing
Market as “AI-powered platform”
The margin compression problem is obvious:
OpenAI lowers price → your margins die
A better model launches → your differentiation dies
Big player clones you → distribution wins
This isn’t anti-AI.
It’s anti-illusion.
The real value layer is:
Workflow integration
Network effects
Proprietary data loops
Embedded distribution
For example, while building EPIC(
https://no-edit.lovable.app)(we’re experimenting with workflow-level integrations rather than raw prompt wrappers), we realized the model layer is becoming commoditized faster than most founders expect.
The question isn’t: “Can I build with GPT?”
It’s: “Do I own anything if GPT improves tomorrow?”
That’s the real risk founders aren’t pricing in.
We’re watching a gold rush where the shovel sellers (model providers) are compounding, and most miners are building on rented land.
Curious how others are thinking about defensibility in AI SaaS right now.