by: Ivan Habib
Website Editor

Many startups have abandoned the traditional methods of marketing and instead now use “AI” as a marketing shortcut to attract investors, even when the true product is merely a thin prompting layer on top of existing models. From a simple Google search, one can easily find over 100 distinct AI tools for app generation alone. While some bring value, many are the same copy-pasted startups with perhaps one novel feature of their own. Despite this lack of distinctiveness, these startups continue to raise billions of dollars of capital from investors, even from prominent firms like YCombinator.

This divergence from solving real problems has led to a decline in the true societal value these startups bring. True value comes from solving a non-trivial problem that many people have. The issue with startups that are just thin wrappers of other AI products is that most of the value lies in the underlying AI product rather than the thin addition of the startup. As a result, these products are often easy to clone, and the companies behind them risk being copied by competitors or overtaken by the very platforms they depend on.

If society continues rewarding AI branding over real utility, startups will keep optimizing for superficial hype instead of durable value. The problem is not rooted in AI itself, but instead the way the market and society have begun to reward the label over the product and value. Too many startups are being valued for how much they appeal to the AI boom rather than how well they can solve meaningful problems. The rise of these companies should not excuse the abandonment of basic standards of value, defensibility, or utility. A company is not innovative simply because it uses AI. Innovation should be measured by usefulness and durability, not by how often a company says “AI.”