A fascinating admission has emerged from the AI startup ecosystem: most of these companies exist primarily because foundation models haven't yet expanded into their category. In other words, they're counting down to irrelevance. It's as if founders have collectively agreed to build businesses with expiration dates printed on the packaging, then ask investors to fund the slow march toward that date.
The joke, as many have acknowledged, is on the venture capitalists. Here sits an entire cohort of startups whose value proposition boils down to: "We do X, but only until OpenAI, Anthropic, or Meta decides X is worth 50 lines of code in their next release." The 12-month window—or however long until foundation models catch up—is not a runway. It's a countdown timer someone forgot to disable.
What makes this remarkable is the candor. Founders aren't pretending they've built defensible moats or sustainable competitive advantages. They're essentially admitting they're renting market share from the clock, hoping to exit before the alarm goes off. Investors, presumably awake and literate, continue writing checks anyway.
In a rational world, this would be called what it is: a bet on speed to acquisition before technological obsolescence. In venture capital, it's called due diligence.
"Category expansion"
DumbCapital covers venture capital and M&A in North America with the skepticism these markets have long deserved and rarely received. We are not impressed by large numbers. We are not moved by press releases. All articles are satirical commentary based on real, publicly reported deals. Nothing here is financial advice.