Why don't AI models create moats?

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 · Forbes

I argued back in 2023 that AI models do not create moats. Workflows do. That is the whole reason SaaS is not dead, despite a year of obituaries.

— The Missing Moat In AI: Your Eval Data · Forbes