No, Your AI Product Doesn’t Have a Moat (Yet)

At a recent Kellogg event, Aravind Srinivas (CEO of Perplexity AI) was asked:

“Do you have a product moat?” His answer: “It’s too early to say.”

And he’s right. In today’s AI arms race, most products—especially those built on top of shared foundation models—lack true defensibility.

If It’s Easy to Build, It’s Easy to Copy

The current AI wave makes building fast—but also makes copying even faster. Many apps risk becoming “just a feature” inside someone else’s platform, as we saw in past tech cycles.

What Actually Creates a Moat?

The classic answers:

• Technology? Getting commoditized fast.

• Data? Only valuable if it’s proprietary and constantly refined.

• Distribution? Mostly owned by incumbents.

The real edge comes when data + distribution create compounding feedback loops. Add two more ingredients, and you start to build real defensibility:

• Exceptional UX – Products that feel like magic win.

• Aligned monetization – Subscription or consumption models that reinforce value, not just revenue.

Take Perplexity’s upcoming Comet browser—a contextual AI agent that completes actions for you, not just answers questions. That’s a bet on behavior, not just models.

Beyond Moats: Can You Even Survive?

AI builders face existential risks:

• Model Drift – Your app may break as foundation models evolve.

• Regulation – Who owns AI output? Who’s liable?

• Geopolitics – GPU access isn’t guaranteed.

What Fintech and Enterprise Leaders Need to Ask

• Are we building real advantage—or just shipping demos?

• Can we create proprietary data flywheels?

• Does our distribution give us leverage—or are we renting reach?

• Is our business model aligned with usage and trust?

Final Word: Not every AI product has a moat

But great teams know how to build one over time—with the right loops, levers, and discipline. VueScale can help fintech and AI ventures turn speed into strategy.

Let’s talk if you’re building something bold—and want it to last.