Keith Rabois’ New Rules of Vertical AI
Khosla’s MD on why the best Vertical AI works with the models & owns what they don’t
Anthropic or OpenAI just launched a product, inked a partnership, or made a senior hire in my industry. Should we be worried? It’s a natural and increasingly common question we hear from founders. The instinct is to treat every lab release as a threat and start building walls. Our guest today argues that’s backwards. He thinks the most durable Vertical AI companies embrace frontier progress — building so every release improves not only their product, but also their moat.
The Takeaway
Frontier models will continue to improve — don’t bet against it.
Autopilot > copilot. Vertical AI that does the job end-to-end gains from improving models, while building edge beyond the tokens.
Don’t marry one model. Model routing to optimize a specific workflow is an edge. Long-term, model mixes and open-weights can recapture margin.
To read the full piece, head over to The Verticalist on Substack.