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99% of AI Startups will fail in 2026, here’s why
- Many AI startups are building tools that rely on OpenAI APIs and are bound to fail due to a lack of unique AI models.
- These tools are essentially AI wrappers that depend on OpenAI technology, offering little innovation beyond generating prompts for OpenAI.
- Most of these tools provide a free plan, but their sustainability is in question as the costs are borne by developers when users do not switch to paid plans.
- OpenAI benefits financially from the usage of these AI wrappers, but their revenue could decline if users stop using these tools.
- Nvidia and Microsoft are profiting indirectly from the AI industry through hardware and cloud infrastructure support for AI models.
- Concerns arise about potential government regulations on AI usage, which could impact the AI industry as a whole.
- Some startups are shifting away from using OpenAI APIs by developing their in-house AI models to reduce costs and maintain service efficiency.
- Local AI models are faster and cost-effective compared to relying on external AI providers.
- The prediction suggests that many AI wrappers may not survive in the market, prompting founders to explore alternatives to sustain their businesses.
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