Monday, September 1, 2025

How AI Companies Avoid Commodification


On LinkedIn, someone mentioned how they thought 99% of AI companies are building wrappers (UIs) for LLMs, and that they were just commodities.

I think the opportunity (to avoid being a commodity) for companies like this is that, while the price of tokens (unit pricing for LLMs) are dropping, costs for inquiries are going up because LLMs are doing more "deep thinking" (which burns tokens). 

Not every query needs deep thinking. So the unique value-add for AI wrappers/UI companies is to design for minimizing tokens without sacrificing accuracy.

© 2025 Praveen Puri