The Twenty Minute VC (20VC) · Monday, August 31, 2026
Aaron Katz identifies the durability of revenue as the single biggest risk for AI companies, particularly generative applications. He notes that switching costs can be very low for these applications as model providers rapidly leapfrog each other.
“If you were to say, what's the single biggest risk, would be durability of revenue.”
“The switching costs can be very low for generative applications. And we're seeing that with these model providers that are leapfrogging one another, sometimes like every week.”
“I would call into question the durability of revenue for some of these AI applications.”