If you want to be a start-up using AI, you have to be in another industry with access to data and a market that OpenAI/MS/Google can't or won't touch. Otherwise you end up eaten like above.
But also one that their terms of service, which are designed to exclude the markets that they can't or won't touch, don't make it impractical for you to service with their tools.
Why? Because they lack specificity. We're domain experts, we know how to prompt it correctly to get the best results for a given domain. The moat is having model do one task extremely well rather than do 100 things "alright"
Check out Will Bennett's "Small language models and building defensibility" - https://will-bennett.beehiiv.com/p/small-language-models-and... (free email newsletter subscription required)