Built on top of their own future competitors
As I’ve mentioned previously, many of the AI tools that organisations are adopting these days don’t actually “make” the AI themselves. They’re a layer built on top of APIs from OpenAI, Anthropic, Google, or some other large model provider.
That’s all hunky dory until the model provider decides to build the same thing.
Unsurprisingly, it happened recently: Anthropic shipped an in-chat app builder that competes directly with Lovable, one the most celebrated startups in Europe and built entirely on top of Anthropic’s own models. A few weeks later, they launched a legal AI product, in direct competition with several legal AI products that … run on Claude. That’s twice in a single month that suppliers became competitors.
In the tech world, that’s called getting “sherlocked”. It’s when a platform absorbs a feature that a smaller company built on top of its technology. It’s been going on for decades, AI is just the newer, faster, player in that game.
But, if you’ve purchased an AI tool recently, it’s worth figuring out what’s underneath it.
A lot of vendors will tell you that their product is “provider-agnostic”, that they can switch model providers any time they want, so they’re not dependent on a single one. It can sound reassuring, but it means they’re basically exposed to all the major model suppliers simultaneously.
Right now, API pricing is artificially low (sometimes up to 17 times below cost) because they’re all competing for market share. When that changes, and it will, the price rise will come from every direction at once.
So, the question for your organisation is less about the tool doing what you need it to do, it’s figuring out what happens to the vendor when their supplier decided to compete with them or when prices rise across the whole industry.
Because, if a vendor does get sherlocked and has to migrate (or fold), you have the same problem they do: your workflows, integrations, and staff training are all built around a tool that’s fighting to stay alive. You’re no more provider- or price-agnostic than they are, and the migration is now your problem to solve.
Colin