United States as the bread in the AI sandwich

Sean Horgan

Notes from

A Chance to Build⁠

⁠

Ben makes a great point that pioneering companies are usually vertical integrated. I think that’s a great way to control quality and reduce risk due to external dependencies. It’s also costly.

Tesla, it should be noted, is a bit different: the company is extremely vertically integrated, building not only its own hardware and software but also a significant number of the components that go into its cars; this isn’t a surprise, given Tesla’s pioneering role in electrical cars (pioneers are usually vertically integrated), but it does mean that Tesla faces a significant long-term threat from the more modular Chinese approach. Given this, it’s not a surprise that

Elon Musk is staking Tesla’s long-term future on autonomy⁠

, in effect doubling down on the company’s integration.

If a pioneer gets to Product-Market-Fit they usually have the opportunity to defrag the hardware so-to-speak and chose where they want to outsource given their understanding of what’s core versus not.

Lessons for the AI space

The AI stack of chips, infra, models, data, and inference-based applications is going through massive change.

It’s a full contact sport with each player at each layer trying to explore the entire stack to understand the best position for their value propositions and guard against disintermediation. See Joel’s Commoditize your Complements:

Strategy Letter V⁠

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