Everyone in AI is building the wrong thing for the same reason (www.joanwestenberg.com)

The AI industry is caught in a relentless cycle of competition known as "Moloch," where companies are pressured to rapidly integrate the latest models without emphasizing genuine product differentiation. As every new model drops, firms scramble to catch up, diverting resources from creating unique solutions to merely keeping pace. This race, driven by investor expectations and market dynamics, results in a convergence towards generic tools—primarily chat interfaces—where creativity is stifled in favor of expediency. The outcome is an industry flooded with similar products, none of which effectively address specific user needs. The financial landscape exacerbates this issue, as high valuations compel companies to pursue broad markets with undifferentiated offerings, sidelining niche innovations. Talented engineers gravitate towards projects focused on model improvement, neglecting crucial areas like user experience that would add real value. For companies trying to foster true innovation, the challenge becomes daunting: escape from Moloch’s grip requires a shift in strategy—prioritizing focused, user-centered development over the race for immediate growth. To thrive, startups must cultivate capital efficiency, embrace niche markets, and resist the urge to conform to prevailing industry norms, thereby paving the way for meaningful advances in AI that deviate from the status quo.