ABOUT THIS EPISODE
For the last two years, AI has been a race to build the best model.
But what happens when the models become cheap, open source, and nearly interchangeable?
That's the question reshaping the entire AI industry.
In this episode of Verticals, Luke and Nic sit down with Jake Saper, General Partner at Emergence Capital and one of the earliest investors in companies like Zoom, Veeva, Ironclad, and Together AI, to discuss where value actually accrues as AI infrastructure becomes increasingly commoditized.
Jake explains why open-source models are rapidly closing the gap with frontier labs, why companies are diversifying across multiple models instead of relying on a single provider, and why the next generation of AI winners may own proprietary workflows, evaluation data, and customer outcomes, not the underlying model itself.
They discuss:
-Why the model is no longer the moat
-How open-source AI is changing enterprise software
-Why token costs are collapsing faster than expected
-The rise of AI-native services
-And so much more
If you're building AI products, investing in the next generation of software, or trying to understand where durable value will be created as AI matures, this conversation is a roadmap for what comes next.
📚 Read Emergence's Definitive Guide to AI-Native Services: https://www.emcap.com/ai-native-services
🎟️ TICKETS DROPPED. Vertical Software Summit — 5-billion-dollar Vertical AI CEOs confirmed to speak. Snag a ticket before they're gone: https://verticalsaasgroup.com/conference
👉 FOLLOW JAKE SAPER
LINKEDIN ➡️ https://www.linkedin.com/in/jakesaper
X ➡️ https://x.com/jakesaper
👉 FOLLOW LUKE SOPHINOS
X ➡️ https://x.com/lukesophinos
LINKEDIN ➡️ https://www.linkedin.com/in/lukesophinos/
NEWSLETTER ➡️ https://www.newsletter.lukesophinos.com/
👉 FOLLOW NIC POULOS
X ➡️ https://x.com/picnoulos
LINKEDIN ➡️ https://www.linkedin.com/in/npoulos/
NEWSLETTER ➡️ https://insights.euclid.vc/
🎬 TIMESTAMPS:
00:00 Why the AI moat is changing
05:40 Open source catches up to frontier models
10:58 Why enterprises are embracing open source AI
16:20 Can OpenAI win the application layer?
24:01 Why services are becoming software
31:28 The race to build proprietary AI data moats
36:38 What AI-native services get right
40:36 Why brand still matters in AI
45:49 The AI founder playbook for the next decade
48:37 The biggest AI opportunities still ahead
TOPICS
1. Open Source AI & Foundation Models
2. AI Native Services & Enterprise AI
3. Vertical AI & AI Moats
4. AI Infrastructure, Fine-Tuning & Proprietary Data
5. The Future of SaaS & AI Business Models
