The generative AI growth minted a startup a minute. However because the mud begins to settle, two once-hot enterprise fashions are wanting extra like cautionary tales: LLM wrappers and AI aggregators.
Darren Mowry, who leads Google’s international startup group throughout Cloud, DeepMind, and Alphabet, says startups with these hooks have their “examine engine gentle” on.
LLM wrappers are primarily startups that wrap current giant language fashions, like Claude, GPT, or Gemini, with a product or UX layer to unravel a selected downside. An instance can be a startup that uses AI to helps students study.
“Should you’re actually simply relying on the again finish mannequin to do all of the work and also you’re virtually white-labeling that mannequin, the business doesn’t have numerous persistence for that anymore,” Mowry mentioned on this week’s episode of Fairness.
Wrapping “very skinny mental property wrapped round Gemini or GPT-5” alerts you’re not differentiating your self, Mowry says.
“You’ve obtained to have deep, large moats which can be both horizontally differentiated or one thing actually particular to a vertical market” for a startup to “progress and develop,” he mentioned. Examples of the deep moat LLM wrapper sort embody Cursor, a GPT-powered coding assistant, or Harvey AI, a authorized AI assistant.
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In different phrases, startups can now not count on to slap a UI on prime of a GPT and get traction on their product, like they may, maybe, in mid-2024 when OpenAI launched its ChatGPT retailer. The problem now’s to construct sustainable product worth.
AI aggregators are a subset of wrappers — they’re startups that mixture a number of LLMs into one interface or API layer to route queries throughout fashions and provides customers entry to a number of fashions. These firms sometimes present an orchestration layer that features monitoring, governance, or eval tooling. Suppose: AI search startup Perplexity or developer platform OpenRouter, which supplies entry to a number of AI fashions by way of a single API.
Whereas many of those platforms have gained floor, Mowry’s phrases are clear to incoming startups: “Keep out of the aggregator enterprise.”
Typically talking, aggregators aren’t seeing a lot development or development as of late as a result of, he says, customers need “some mental property in-built” to make sure they’re routed to the fitting mannequin on the proper time based mostly on their wants — not due to behind-the-scenes compute or entry constraints.
Mowry has been within the cloud sport for many years, reducing his enamel at AWS and Microsoft earlier than organising store at Google Cloud, and he’s seen how this performs out. He mentioned the state of affairs as we speak mirrors the early days of cloud computing within the late 2000s/early 2010s as Amazon’s cloud enterprise began taking off.
At the moment, a crop of startups sprang as much as resell AWS infrastructure, advertising and marketing themselves as simpler entry factors that supplied tooling, billing consolidation, and help. However when Amazon constructed its personal enterprise instruments and clients discovered to handle cloud providers instantly, most of these startups had been squeezed out. The one survivors had been those who added actual providers, like safety, migration, or DevOps consulting.
AI aggregators as we speak face related margin strain as mannequin suppliers develop into enterprise options themselves, doubtlessly sidelining middlemen.
For his half, Mowry is bullish on vibe coding and developer platforms, which had a record-breaking yr in 2025 with startups like Replit, Lovable, and Cursor (all Google Cloud clients, per Mowry) attracting main funding and buyer traction.
Mowry additionally expects sturdy development in direct-to-consumer tech, in firms that put a few of these highly effective AI instruments into the arms of shoppers. He pointed to the chance for movie and TV college students to make use of Google’s AI video generator Veo to deliver tales to life.
Past AI, Mowry additionally thinks biotech and local weather tech are having a second — each when it comes to enterprise funding going into the 2 industries and the “unimaginable quantities of knowledge” startups can entry to create actual worth “in methods we’d by no means have been in a position to earlier than.”
