When AI models improve, users can quickly switch to better options.
This is because changing AI providers often involves minimal technical effort.
Redirecting an API call does not require new infrastructure investments.
This low barrier to switching allows demand to shift rapidly between competing AI models.
Examples
- A software firm can easily change the AI model it uses for code generation.
- A law firm can quickly switch AI providers for summarizing legal documents.
- A retailer can redirect its translation tasks to a different AI model.
- Developers can update their API calls to use a new, more performant AI model.
It's a fair reading to suggest that the time and effort put into custom prompt engineering and integrating workflows with a specific AI model could make switching providers seem like a real headache, helping established players charge more.
However, for many developers using API-based models, the actual barrier to entry for new providers is surprisingly low.
They can often redirect their API calls to a different service with just a few configuration tweaks, not a full system rewrite, if a competitor offers better performance or pricing.
Think of it like changing your utility provider: while there's some paperwork, if the new one offers significantly better rates, many will make the jump fairly quickly, meaning providers can't just coast on inertia.