Investors try to manufacture AI winners early
AI markets are forming quickly, and VCs no longer trust that organic competition will surface clear winners. Instead, they are dumping capital, advisory support, and commercial introductions into a handful of companies to give them structural advantages before rivals catch up.
Why this is happening
- AI markets are winner-take-most, especially in areas requiring scale, data, and compute.
- Costs to train competitive models are so high that early capital concentration creates unassailable moats.
- Investors want leverage in partnership negotiations with cloud providers and enterprise buyers.
Implications for startups
- Winners get access to massive, preferential funding.
- Everyone else faces shrinking room to differentiate.
- Ecosystems may ossify around a few well-backed players, affecting talent flows and customer adoption.
The broader economic signal
Kingmaking represents the financialization of AI competitionVCs are shaping the field, not just picking players.