Post AGI, what entrepreneurial moats will still exist?

Understanding Entrepreneurial Moats

An entrepreneurial moat is a competitive advantage that protects a business from rivals, like a castle's moat. Examples include brand strength, network effects (where more users make a service more valuable), and cost leadership. In a post-AGI world, where Artificial General Intelligence (AGI)—AI capable of human-level tasks—becomes common, these moats might face challenges. For instance, AGI could optimize costs better than humans, potentially eroding cost-based advantages.

What Might Survive?

Research suggests some moats will likely endure. Brand loyalty and reputation seem likely to remain strong, as consumers often prefer trusted brands, even with AGI. Network effects, like those seen in social media platforms, may persist, though AGI could help scale them. Human-centric moats, such as trust, relationships, and community, might become more critical, as AGI may struggle to replicate emotional connections, especially in fields like therapy or personal care. Physical resources (e.g., rare minerals) and regulatory barriers (e.g., licenses) also seem likely to hold, given AGI's digital nature.

Defining Economic Moats

An economic moat, a concept popularized by Warren Buffett, refers to a company's ability to maintain competitive advantages that protect its long-term profits and market share from competitors. According to How an Economic Moat Provides a Competitive Advantage, published January 18, 2025, these advantages can include cost leadership, intangible assets like brands or patents, network effects, and switching costs. For startups, moats like patented technology, government contracts, and strong brands are often cited as uncommon but valuable advantages.

In a post-AGI context, where AGI—defined by a 2020 Wikipedia entry as AI capable of performing any intellectual task a human can, with 72 active research projects globally at the time—becomes prevalent, these traditional moats face significant challenges. For example, AGI's ability to optimize processes could erode cost-based advantages, and its innovation capacity might render patents less defensible.

Traditional moats like network effects, scale economies, and regulatory advantages (e.g., patents, licenses) were also cited as potentially sustainable.

Durable moats are often built on network effects, data, and repeat engagement, which could remain relevant. In a post-AGI era, production costs could tend toward zero, potentially shifting from a market economy to a cooperative system, challenging traditional moat concepts.

If AGI drives costs to zero, competition based on scarcity could fade, with success measured by impact or uniqueness.

Musk's focus on innovation over moats could resonate in a post-AGI world, where rapid technological change might make static advantages less relevant, while Buffett's belief in enduring moats like brand suggests some advantages will persist, especially in consumer-facing industries.

Conclusion and Implications

In summary, while AGI will reshape the business landscape, entrepreneurial moats are likely to evolve rather than disappear. Human-centric advantages, brand loyalty, network effects, proprietary data, regulatory barriers, physical resources, and innovation speed may all play roles, with varying degrees of endurance. Entrepreneurs will need to adapt, focusing on leveraging AGI for efficiency while emphasizing what humans do best—empathy, creativity, and connection. The key will be finding a balance, creating resilient moats in an ever-changing technological landscape.

While doing reserach for this post it has come to notice that an incredible amount of people ignore or are naive to the reach of AI. Many suggest AI will have a lack of connecting and “human” capabilities. Completly ingnoring how easy this are already being deployed.