Question 1

Is OpenAI going bankrupt?

Accepted Answer

_Lutz's take on OpenAI economics and moats._

> OpenAI — "Experts predict bankruptcy" — was attention-grabbing, a deeper look reveals that the company has simply seen a drop in its users. Should you fear ChatGPT will disappear? No, quite the opposite.

— [OpenAI Isn't Going Bankrupt, But It Has A Business Model Problem](https://www.forbes.com/sites/lutzfinger/2023/08/18/is-openai-going-bankrupt-no-but-ai-models-dont-create-moats/) · _Forbes_

> is more for Microsoft than for OpenAI. Regulatory Protection. Regulation can create a moat.

— [How OpenAI Can Secure Its Investments - A Playbook That Needs Microsoft](https://www.forbes.com/sites/lutzfinger/2023/08/18/the-potential-moat-of-openaihow-openai-can-secure-its-investments/) · _Forbes_

Question 2

What is the competitive advantage of LLMs for business?

Accepted Answer

_How enterprises can build durable AI advantage._

> AI-driven businesses have a combination of either a model moat, a data moat, or the brand moat. The new LLMs, like OpenAI's model, can give an advantage in all areas, but it is by no means a given. Since OpenAI launched ChatGPT, large language models have entered the fantasies of founders worldwide. Every day about a dozen new startups announce their AI-enabled feature.

— [What Is The Competitive Advantage Of LLMs Like ChatGPT For Your Business? Three Takeaways.](https://www.forbes.com/sites/lutzfinger/2023/04/04/what-is-the-competitive-advantage-of-llms-like-chatgpt-for-your-business-three-takeaways/) · _Forbes_

> OpenAI's demise are exaggerated, but they point to a potential problem that Large Language Models (LLMs) do not have a business moat. But the company understands what it needs to do. Here is its playbook: (1) Invest in a better User Experience focused on LLMs; (2) Create a feedback loop that improves their LLMs over time; (3) Integrate into many workflows to improve utilization; (4) Enterprise (private) data is king — allow BYOD (bring…

— [How OpenAI Can Secure Its Investments - A Playbook That Needs Microsoft](https://www.forbes.com/sites/lutzfinger/2023/08/18/the-potential-moat-of-openaihow-openai-can-secure-its-investments/) · _Forbes_

Question 3

What is the missing moat in AI?

Accepted Answer

_Eval data as the durable moat._

> What wins the AI race? UX?

— [The Missing Moat In AI: Your Eval Data](https://www.forbes.com/sites/lutzfinger/2026/05/26/the-missing-moat-in-ai-your-eval-data/) · _Forbes_

> Regulatory Protection. Regulation can create a moat. Sam Altman has been on tour with policymakers advocating for more oversight and control. Additionally, OpenAI now allows blocking their scraping mechanism with a "NoAI" tag.

— [How OpenAI Can Secure Its Investments - A Playbook That Needs Microsoft](https://www.forbes.com/sites/lutzfinger/2023/08/18/the-potential-moat-of-openaihow-openai-can-secure-its-investments/) · _Forbes_

Question 4

Why don't AI models create moats?

Accepted Answer

_The structural reasons foundation models commoditize._

> AI does not easily create moats. Early in the LLM hype, I wrote that a model moat does not exist for OpenAI — such a moat also did not exist in previous Machine Learning waves. No Model Moat: transformer models are math.

— [DeepSeek - New Economic Rules And Regulatory Challenge](https://www.forbes.com/sites/lutzfinger/2025/01/29/deepseeknew-economic-rules-and-regulatory-challenge/) · _Forbes_

> I argued back in 2023 that [AI models do not create moats](https://www.forbes.com/sites/lutzfinger/2023/08/18/is-openai-going-bankrupt-no-but-ai-models-dont-create-moats/). Workflows do. That is the whole reason [SaaS is not dead](https://www.forbes.com/sites/lutzfinger/2026/04/24/saaspocalypse-is-deadthe-future-of-saas-is-saas/), despite a year of obituaries.

— [The Missing Moat In AI: Your Eval Data](https://www.forbes.com/sites/lutzfinger/2026/05/26/the-missing-moat-in-ai-your-eval-data/) · _Forbes_

Question 5

Why is eval data a moat?

Accepted Answer

_Evaluation data as the strategic differentiator._

> All of them matter, and all of them are being fought over. But the real value may sit in the one thing OpenAI, Anthropic, and Gemini have not yet made central: your own eval data. Sure, there is the occasional thumbs-up button. But who is really using that signal?

— [The Missing Moat In AI: Your Eval Data](https://www.forbes.com/sites/lutzfinger/2026/05/26/the-missing-moat-in-ai-your-eval-data/) · _Forbes_

> One cannot protect them easily. No Data Moat: general knowledge is widely available. My first startup faced this reality — services that commanded six-figure fees became available for $100 (a 1,000x price drop) once competitors caught up using the same machine learning algorithms. A Real Moat: Engineering Excellence — smart engineering work pushing the frontier of what is possible is a moat.

— [DeepSeek - New Economic Rules And Regulatory Challenge](https://www.forbes.com/sites/lutzfinger/2025/01/29/deepseeknew-economic-rules-and-regulatory-challenge/) · _Forbes_

Q&A, LLM Moats

Is OpenAI going bankrupt?

What is the competitive advantage of LLMs for business?

What is the missing moat in AI?

Why don't AI models create moats?

Why is eval data a moat?