a16z: 94% of enterprise LLM buyers expect spend to rise — three rules for AI apps to earn their premium
a16z · x · 2026-11-03
a16z's Tugce Erten argues AI application companies must outpace model progress to keep their premium: 94% of enterprise LLM buyers still expect spending to rise, even as every upgrade makes DIY alternatives cheaper. Her three rules: operate the workflow better than the customer can, make context cheaper to rent than to rebuild, and prove value before pricing to capture it. Cases: Harvey beat a general assistant and Repsol's in-house tool in a blind test; Notion bought Decagon's support agents instead of building. Core thesis: your advantage must widen faster than model progress for the app to keep earning its premium.
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