🌘 The Last Days of the Startup Edge
What if AI isn’t a new beginning, but the end of the digital era as we knew it?
The author of this post is Julien Petit
In the last article, I asked a simple question: Where did the edge go?
This time, let’s zoom out.
What if the uncertainty VCs are facing today isn’t a bug of the system, but a predictable outcome?
What if the digital economy, once the wild west of infinite opportunity, is now following the same path as every other major industry before it?
Let’s rewind history.
I. From Expansion to Consolidation
Look at the steel industry.
Look at oil.
Look at railroads, cars, even agriculture.
All of them followed the same curve:
Early chaos. Explosive growth. Low barriers to entry. Then, at some point, a shift.
Consolidation. Power concentrated in fewer and fewer hands.
Barriers rising. Margins compressing. Innovation becoming incremental.
And suddenly, the era of new entrants is over.
The digital world, computer, software, internet, platforms, was supposed to be different.
For 30 years, it was a space of continuous disruption.
Startups could still win. David could still beat Goliath.
But today, that’s no longer obvious.
II. The Goliaths of the Digital Age
The big difference with steel or oil?
The giants of today’s tech economy, Google, Apple, Meta, Microsoft, Amazon, Nvidia don’t just dominate markets. They define the infrastructure of the internet itself.
They control:
the cloud we build on,
the platforms we distribute through,
the APIs we plug into,
the datasets that train our models,
and the user attention that drives adoption.
And now, with AI, the gap is widening even more.
These companies have:
Unmatched cash reserves (Apple has more cash than many countries).
Technological mastery (owning the chips, the labs, the infra).
Self-reinforcing network effects (products that feed each other, data that locks users in).
And in this environment, what room is left for real breakout startups?
III. The Rise of the Dependent Startup
We’re not saying startups are dead. Far from it.
But the kind of startup that thrives is changing.
In the new paradigm:
Startups are not disruptors, they are plugins.
The best shot at scale is to build inside or around the GAFAM ecosystem.
The most investable companies are not the boldest, but the most integratable.
This isn’t necessarily bad.
But it requires a completely different mindset from the early days of the VC game.
IV. The AI Era: The Final Lock-In?
AI was supposed to be the next great opening.
The new internet. The fresh layer of soil.
But instead, what we’re seeing is even faster consolidation.
Training massive models requires:
Billions in compute,
Access to elite talent,
Infrastructure only hyperscalers can provide.
So what’s left?
Tiny slivers of opportunity:
Verticalized applications,
Model compression,
UX-layer products,
Workflow integrations…
Important, yes.
But these are extensions, not revolutions.
The core stack, the real edge, seems to be locked.
V. Implications for VCs (and Founders)
If the frontier is closing, then the game must change.
For founders:
You may need to abandon the myth of disruption.
Winning might mean being the best integrator, not the boldest innovator.
For VCs:
The old playbook of “invest early in a future category leader” becomes riskier.
You may need to underwrite different outcomes, smaller wins, faster liquidity, or ecosystem-dependent exits.
This isn’t pessimism. It’s realism.
And it might just be the first step toward inventing a new kind of entrepreneurship for this new era.
🌍 The Question That Remains
If the digital economy really is entering its consolidation phase, then:
What spaces are still open for true breakthrough innovation?
Where are the next fault lines forming?
And who are the founders bold enough and strange enough to find them?
But maybe there’s a bigger question we haven’t asked yet:
Is AI the next chapter of the digital era, or the end of it?
Think of it this way:
Electronics made operating systems possible.
Operating systems enabled software.
Software met the internet, and together they gave us search, marketplaces, media, and platforms.
That was the digital era. It unfolded over decades.
AI was born in that same timeline, but is it still part of that same arc?
Because if it is, then we’re probably witnessing its final consolidation: A phase where most opportunities are captured by the giants who already own the infrastructure, the talent, and the capital.
But if AI is actually something else, a new paradigm, then all the old power structures could be challenged.
New fault lines could emerge. New ecological niches could appear, still empty, still fragile, still open.
The truth is: we don’t know.
And that’s exactly why, for VCs, the stakes have never been higher.
Because if we are still in the digital era, then venture capital might be running out of air.
But if we are crossing into a truly new terrain, then it’s not the end.
It’s the beginning, but only for those who are ready to explore without a map.
The author of this post is Julien Petit
“Cutting Through The Noise” by Mighty Nine
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