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Ask HN: What's the verdict on GPT wrapper companies these days?

12 points NewUser76312 | 2 comments | 07 Jul 25 20:10 UTC | HN request time: 0.623s | source

Do you use any, do you find them valuable, do they do something the foundation model companies are not doing?

I wondered this about a year ago and wanted to revisit the question.

Today I did some research on Product Hunt and also looked through various recent YC companies. What hit me immediately was - wow! - there are some really good designers (or maybe it's with AI now) putting together slick product demos and 1-3 min vids. Most of the products I came across are AI for various things like creating office docs, sending emails, creating presentations, web scraping, making mobile apps, managing meetings and relationships, etc.

However, when I get past the flashiness and start investigating a bit, I don't really see what's special or setting these products apart from a foundation model + rudimentary RAG in some cases. In fact, many file-related and memory-dependent applications can be done perfectly well via the base Open AI chat website today. To give credit where it's due, I think some of these products have better 'flows' via various prompt engineering tricks. Enough to justify a big monthly stipend over my existing OAI/Anthropic subscriptions, I don't know.

But my overall take when I see many of these, is that they are probably not startups, at least not ones that I see lasting. They have to go more and more niche to get away from the tentacles of increasingly capable foundation model capabilities. The big ones that seem to be enduring and doing well are Perplexity and Cursor, they seem to have grown quickly enough in the early days to attract a lot of resources and talent to keep building features. So maybe the foundation models can only do ~60% of what they do, while for the products/startups I described above, that number is more like 90%. My conclusion is to be somewhat bearish on 'GPT wrappers', perhaps until more creative ideas (e.g. physical-world use cases) come to fruition, because the SaaS space seems rough.

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thimabi ◴[08 Jul 25 02:02 UTC] No.44496312[source]▶
Right now, AI companies profit much more from wrappers, which pay API prices, instead of regular users, who pay loss-leader subscriptions. There’s little incentive for them to bother competing with wrappers today.

Over time, however, I do think most wrappers are doomed. Prices will inevitably equalize, and AI companies can rapidly capture a lot of market share with little effort — via custom bots, agents and the like. If a wrapper is nothing more than an optimized prompt and a beautiful UI, it will be crushed by the competition one day.

That being said, wrappers that implement proprietary algorithms can still thrive in the long run. Of course, if an app is that good, AI companies might eventually go after it anyway, regardless of how advanced the app is.

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1. NewUser76312 ◴[08 Jul 25 17:22 UTC] No.44502090[source]▶
Good comment, agree for the most part.

>wrappers that implement proprietary algorithms can still thrive in the long run.

This is true, but they need to defend from multiple fronts. Do you believe in Perplexity long-term, or a) OpenAI moving into search, or b) Google moving their search into AI.

It's an interesting hybrid product where I suppose the winner is unclear, because it seems Perplexity has executed fast and strong thus far.

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2. thimabi ◴[08 Jul 25 22:21 UTC] No.44504568[source]▶
> Do you believe in Perplexity long-term, or a) OpenAI moving into search, or b) Google moving their search into AI.

I must confess that I’ve never used Perplexity, as ChatGPT works incredibly well for me. Never felt the need to try something new, and maybe that says something about Perplexity’s future.

Ironically enough, I find Google’s AI-based search awful, so for me ChatGPT has replaced Google for the most part.

If I had to guess, I concur that the winner in this space is still unclear. And that fierce competition is very good for us as customers.