Where Is Your Moat?

Source: https://pwnfunction.com/posts/where-is-your-moat/ Author: pwnfunction.com Date: 2025-07-06

Summary

Short essay questioning where competitive moats exist in the AI era. AI has commoditized many software capabilities — so what remains defensible?

Key Claims

• AI commoditizes execution: with LLMs and agents, building functional software is easier than ever. The execution moat is shrinking.
• Remaining moats: data (proprietary training data), distribution (users who are locked in by habits/integrations), and brand (trust).
• The data moat: the most durable — AI companies with proprietary data from their users can continuously improve.
• The network effect remains: platforms where each user makes the product better for other users still have defensible positions.
• The “commodity paradox”: as AI makes building easier, distribution and brand become MORE valuable, not less.

Concepts

• Synthetic Data — proprietary data as moat, including operational agent trace data
• Coding Agents — agent labs thesis connects to this moat analysis