Peter Yang on AI-era software moats: distribution, enterprise trust, and proprietary data
petergyang · x · 2026-10-12
Investor Peter Yang pushes back on the "all software is becoming open source" narrative, outlining remaining moats in the AI era:
- Distribution & network effects: AI can reverse-engineer apps, but gathering users simultaneously is hard; conversely, those with distribution can profit quickly even with an AI wrapper.
- Enterprise compliance & trust: Enterprises drive 60% of software spend and still want liability, support, and accountability. Fortune 500 companies won't switch from Adobe soon—but bloated enterprise apps used at 20% capacity are easier to vibe-code internal replacements for.
- Proprietary data & memory: The #1 moat. He suggests that if your app generates valuable data, going free and selling data to AI labs may beat a $25/month SaaS—Reddit makes $200M+ from OpenAI and Google licensing deals, far exceeding consumer subscription revenue.
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