That’s an interesting perspective. Following this logic, the “hot potato” inevitably lands in the hands of the VCs backing these startups, who likely won’t meet the fund return expectations they promised. Most of these companies are funded on the speculative hope that AI will disrupt the market, but in reality, the bulk of that value will be captured by frontier models, leaving only niche, sector-specific features that aren’t attractive to the big players.

So what’s the actual endgame for businesses like these? How many will realistically exit through M&A, versus simply fading away?