Gurley argues AI memory systems create powerful switching costs that lock users in permanently once they rely on them.
“I start relying on one of these things as my memory and I don't have a way to pull that out and jump to something else, I'm stuck.”
Gurley argues AI memory creates switching costs that lock users in to whichever platform solves it first.
“I start relying on one of these things as my memory and I don't have a way to pull that out and jump to something else, I'm stuck. Yes. Like I am hooked, locked, stuck.”
Gurley says LLM switching costs rate around two out of 100, showing extremely high promiscuity among models.
“And the per promiscuity Mhmm. Is unbelievably high. Another way of saying that, one one of the things that leads to high valuation multiples is switching cost.”
Gurley rates LLM switching costs at two out of 100, calling it remarkably low.
“if you were to rate these LLMs on their switching cost with zero maybe being none and a 100 being perfect, I'd say they're two. Yes. Like, it's remarkably low.”
Gurley argues email integration for AI creates insurmountable switching costs for whoever achieves it first.
“Like, that's really, really powerful. And I think the switching costs are insurmountable if someone gets to that place first.”
Gurley believes OpenAI's long-term success depends more on switching costs than staying at model frontier.
“I continue to believe that OpenAI's most likely chance to long term success comes from switching cost and lock in more than it will come from staying on the edge of the of the model race? Because I think”