Distribution is the only moat that holds in the AI economy
- Anmol Shantha Ram
- Apr 14
- 2 min read
Generative AI has restructured every business sector. It’s fast, cheap, and widely accessible.
And the same question gets raised in almost all of my conversations.
What is your competitive edge when everyone has the same tools?
Most people think it will be speed, originality and distribution.
My view is speed and originality are table stakes.
The only moat that holds is distribution. You will have no edge without reach.
Speed fades fast
Product cycles have collapsed. What once took months now takes days. AI accelerates every step. But the same is true for everyone else.
Breakthroughs get copied instantly. AI coding tools shrink feature gaps in software within days.
The speed advantage window has narrowed to the point where it barely exists. When everyone has similar AI tools, simply moving fast no longer provides lasting protection.
Originality gets commoditised
Generative AI turns unique ideas into templates. What once took deep skill like design, content and product thinking is now cheap and quick to produce.
The collapse of edtech companies like Chegg, LawGeex, Kira Systems, etc. is a stark warning. Business models break when AI handles the core better, faster, and cheaper.
A brilliant idea now has precious little time before competitors replicate or riff on it using comparable AI capabilities. Originality alone cannot hold the line.
Distribution is the only viable moat
Distribution connects you to customers. It is brand, trust, partnerships, user data, and feedback loops. These take time to build and can’t be copied overnight.
AI makes strong distribution even stronger. More data, smarter targeting, faster iteration.
Amazon’s logistics. Apple’s ecosystem. Microsoft’s enterprise relationships.
These aren’t just assets. They’re moats.
They represent distribution advantages that competitors find nearly impossible to dismantle, even with AI-powered offerings.
Some exceptions exist
In heavily regulated sectors, speed can remain a moat due to high compliance barriers. Proprietary data can still drive original outputs when models are trained on unique inputs.
Building for tomorrow
Enterprise companies and startups need a clear strategy given these shifts.
While continuing to invest in speed and originality, the main focus must shift toward building and defending distribution networks.
- Prioritise direct customer relationships over connections through intermediaries
- Build community connections that make switching costs higher
- Invest in collecting unique data that improves as your user base grows
- Develop ecosystem partnerships creating mutual dependence
- Use AI to strengthen your distribution rather than just creating new products
When AI makes creation universally accessible, the path to market becomes the ultimate competitive advantage.
Distribution remains the only defensible business moat in the age of AI.
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