The other day, I was reading a book on my Kindle. It was early in the morning, I was barely a cup of coffee in, and I encountered a super dense passage on options strategies. I didn’t feel like doing the mental gymnastics of figuring out what the passage was saying, so I opened ChatGPT on my phone (Amazon’s Rufus is really bad). I took a picture of the Kindle and asked ChatGPT to explain it to me. It made sense instantly.

Think about how crazy this is. Two big tech companies with no intention of interoperating — Amazon and OpenAI — were forced to speak with each other.

This is what AI does: it flattens walled gardens. Try as Big Tech might to retain unilateral control, it cannot fully lock down information. To sell to human users, information must be packaged in a universal format (natural language, images, etc.) and travel outside the walled garden to our brains. Historically, this didn’t threaten the moat because porting information from one context to another required a human to do it manually — an extremely expensive process. AI reduces this cost to near zero.

From this, we can see that, at the limit, AI will effectively turn all proprietary APIs into open APIs. This will massively disrupt the business models of many internet companies, which rely on information scarcity as their moat. Facebook’s social graph, Yelp’s ratings and reviews, and Google’s index of the web all rely on keeping information closed.

If we want to understand how internet businesses will be built in this new environment, we should look to crypto. There are very few, if any, industries with more experience building under these conditions. APIs are open by default, so there is no information scarcity. This has forced crypto businesses to figure out alternative sources of power.

The primary playbook: commoditize the information with open APIs and accrue power through scarcity elsewhere. 

Liquidity network effects are the canonical example. An onchain exchange is entirely open for anyone to read from or write to. There is no meaningful information moat in the traditional sense. Anyone can build on top of it, aggregate it, fork it. And yet power still emerges. Why? Because the scarce resource is not the information — it is the liquidity. The asset itself is concentrated in a particular venue, and that concentration compounds.

Traditional internet businesses that will now be forced to build in an environment of open APIs should follow suit. Commoditize the information, and accrue power through another form of scarcity. That scarce resource could be liquidity. It could be physical assets. It could be trust. It could be regulatory position. The key is to build around what AI cannot flatten.

Airlines are a useful example of a business that has already figured this out. Flights are among the most commoditized resources on the internet. Google Flights, Kayak, Expedia — schedules, routes, and prices are all highly legible and easy to compare. The industry learned early that information should be broadly distributable; commoditizing it allows it to be aggregated, and aggregation drives demand.

But the value in the airline business was never primarily in the information. It sits in the scarce complements: the planes, the loyalty tiers, and the brand. The information is open because the information is not where defensibility lives.

That is increasingly the right mental model for the rest of the internet. Crypto never had a choice: open APIs were the starting condition, not a strategy. It had to learn to build around that. Now everyone else will too.

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