Lumian Gen AI Newsletter Issue #61

Welcome to the 61st edition of the Lumian Gen AI Newsletter!

Every founder riding the AI wave believes their tool is irreplaceable. Until OpenAI pushes an update and the rug gets pulled.

We've entered an era where building on the wrong abstraction layer is terminal. One day you're the toast of VC Twitter, the next you're a Chrome extension feature that got baked into a model update. Tools for summarization, outbound sales, or voice synthesis, once seen as startups, are now footnotes inside a prompt. A force of nature collapsing superficial layers of value into the model itself.

Welcome to the Great Flattening.

The closer your product is to the core capabilities of the model (text, voice, image, retrieval), the faster it's commoditized. It’s not just about how fast you ship, it’s about where you build. And building next to the model’s center of gravity is like setting up shop in a floodplain. 

But all is not lost.

The most promising founders in AI are doing something deeply uncool: they’re embedding into gnarly, domain-specific problems. Think insurance workflows, Medicaid reimbursement, customs clearance, safety audits. These aren’t buzzy. But they’re durable.

These startups manage workflows, handle compliance, and earn trust. They integrate so deeply that removing them would cause real organizational pain. That’s their moat. And when a new model releases? They just swap in the new capability, no reinvention required. This is the paradox of progress: the easier it gets to build a prototype, the harder it gets to build a business.

So, what survives? Not the dazzling tools. Not the hackathon winners. But the AI companies that look like operations firms. Like industry-specific SaaS. Like services businesses in disguise. They don’t sell prompts but actually deliver results.

The AI winners will monetize like professional services but scale like software. Their market isn’t apps but headcount. If an AI can replace a claims adjuster, that’s not $100/month SaaS, it’s $100K/year labor.

So how do you play to win?

• You go deep, not wide.

• You pick problems where hallucination is a liability.

• You serve customers who care more about reliability than novelty.

• You build in spaces where the job still matters, even if the output is automated.

In a world where models are abundant, the scarcest assets are distribution, trust, and embeddedness. The strongest AI companies won’t brag about being AI-first. They’ll be trusted partners in thorny industries and that trust will be their edge.

You don’t beat the model by outrunning it. You beat it by going where it can’t go alone.

Happy reading! 📚🤖🎵

In this week’s issue:

• News Flash: OpenAI’s new models, ChatGPT x Social, Nari Labs Dia

• Twitter Spotlight: Build An App In 3 Minutes

• AI in Practice: AI Product Research Tools

• Fundraising: The biggest deals in AI

• Nerd Out: Technical and Business Content for Everyone

🚀 Twitter Spotlight

Build an App in 3 minutes

🚀 AI in Practice

AI Product Research Tools

• ProductRank - Understand how the top AI models promote products and brands

• Brandlight - Improve your brand’s visibility on LLMs