The world of artificial intelligence is a fascinating, but extremely perilous, playground. Imagine for a moment that you’re a company that makes large-scale language models (LLMs). You think you’ve hit the jackpot, don’t you? Well, think again.
If you don’t have your own distribution, you’re in permanent danger.
The commoditisation of LLM models
Your model, which took you months or even years to develop, is becoming commonplace faster than you can say ‘AI’. Before you even have time to put it on the market, it becomes a commodity, one product among many. And why is that? Because technology is evolving at breakneck speed, and competition never sleeps.
The Power of Distribution
While you’re struggling to improve your model, the distribution giants – cloud providers, development platforms, enterprise software behemoths – are reducing you to a mere option in their technology stack. For them, your model is just a cog in a well-oiled, cost-optimised machine. They choose several models and juggle between them on the basis of price, latency and performance.
Model Aggregators
Companies with direct customer contact – Amazon, Microsoft, Google, Salesforce, HubSpot, to name but a few – are becoming model aggregators. They don’t need to support a single model provider. Instead, they prefer to dynamically route traffic to the one that offers the best cost-performance compromise. And with a snap of the fingers, your model becomes interchangeable.
The example of DeepSeek
Do you remember DeepSeek? One day, it was the star of the market, and the next day, an unremarkable line on someone else’s bill. The speed with which these giants have integrated DeepSeek is a perfect example of this ruthless dynamic.
The Endless Race
To stay in the race, you are condemned to an endless quest for fine-tuning, optimisation and cost reduction. No sooner have you improved your model than the competition catches up. So you start again, and again.
The OpenAI exception
But there is one exception: OpenAI. With ChatGPT, they have created an AI behemoth aimed directly at the consumer. Even if the model layer is becoming commonplace, their distribution has reached cruising speed. OpenAI doesn’t need to fight for API slots in someone else’s market; they are the market. It’s a different kettle of fish, where control of distribution makes all the difference.
The Crucial Question
So the question isn’t whether your model is the best. No, the real question is: who owns your customers? If the answer isn’t ‘yours’, then you’re just a replaceable input in someone else’s business. Yes, it’s harsh, but it’s the reality of the marketplace.
In conclusion, in the AI world, control of distribution has become a critical success factor. If you don’t own your own distribution, you risk finding yourself in a precarious position, reduced to an interchangeable supplier in a ruthless market.
So think carefully about your strategy.