Google VP warns that two types of AI startups may not survive

The generative AI roar minted a startup a minute. But arsenic the particulate starts to settle, 2 once-hot concern models are looking much similar cautionary tales: LLM wrappers and AI aggregators. 

Darren Mowry, who leads Google’s planetary startup enactment crossed Cloud, DeepMind, and Alphabet, says startups with these hooks person their “check motor light” on.

LLM wrappers are fundamentally startups that wrapper existing ample connection models, similar Claude, GPT, oregon Gemini, with a merchandise oregon UX furniture to lick a circumstantial problem. An illustration would beryllium a startup that uses AI to helps students study.

“If you’re truly conscionable counting connected the backmost extremity exemplary to bash each the enactment and you’re astir white-labeling that model, the manufacture doesn’t person a batch of patience for that anymore,” Mowry said connected this week’s occurrence of Equity. 

Wrapping “very bladed intelligence spot wrapped astir Gemini oregon GPT-5” signals you’re not differentiating yourself, Mowry says. 

“You’ve got to person deep, wide moats that are either horizontally differentiated oregon thing truly circumstantial to a vertical market” for a startup to “progress and grow,” helium said. Examples of the heavy moat LLM wrapper benignant see Cursor, a GPT-powered coding assistant, oregon Harvey AI, a ineligible AI assistant.

In different words, startups tin nary longer expect to slap a UI connected apical of a GPT and get traction connected their product, similar they could, perhaps, successful mid-2024 erstwhile OpenAI launched its ChatGPT store. The situation present is to physique sustainable merchandise value. 

AI aggregators are a subset of wrappers — they’re startups that aggregate aggregate LLMs into 1 interface oregon API furniture to way queries crossed models and springiness users entree to aggregate models. These companies typically supply an orchestration furniture that includes monitoring, governance, oregon eval tooling. Think: AI hunt startup Perplexity oregon developer level OpenRouter, which provides entree to aggregate AI models via a azygous API. 

While galore of these platforms person gained ground, Mowry’s words are wide to incoming startups: “Stay retired of the aggregator business.”

Generally speaking, aggregators aren’t seeing overmuch maturation oregon progression these days because, helium says, users privation “some intelligence spot built in” to guarantee they’re routed to the close exemplary astatine the close clip based connected their needs — not due to the fact that of behind-the-scenes compute oregon entree constraints.

Mowry has been successful the unreality crippled for decades, cutting his teeth astatine AWS and Microsoft earlier mounting up store astatine Google Cloud, and he’s seen however this plays out. He said the concern contiguous mirrors the aboriginal days of unreality computing successful the precocious 2000s/early 2010s arsenic Amazon’s unreality concern started taking off.

At that time, a harvest of startups sprang up to resell AWS infrastructure, selling themselves arsenic easier introduction points that provided tooling, billing consolidation, and support. But erstwhile Amazon built its ain endeavor tools and customers learned to negociate unreality services directly, astir of those startups were squeezed out. The lone survivors were the ones who added existent services, similar security, migration, oregon DevOps consulting. 

AI aggregators contiguous look akin borderline unit arsenic exemplary providers grow into endeavor features themselves, perchance sidelining middlemen. 

For his part, Mowry is bullish connected vibe coding and developer platforms, which had a record-breaking twelvemonth successful 2025 with startups similar Replit, Lovable, and Cursor (all Google Cloud customers, per Mowry) attracting large concern and lawsuit traction.

Mowry besides expects beardown maturation successful direct-to-consumer tech, successful companies that enactment immoderate of these almighty AI tools into the hands of customers. He pointed to the accidental for movie and TV students to usage Google’s AI video generator Veo to bring stories to life.

Beyond AI, Mowry besides thinks biotech and clime tech are having a infinitesimal — some successful presumption of task concern going into the 2 industries and the “incredible amounts of data” startups tin entree to make existent worth “in ways we would ne'er person been capable to before.”