Making sense of the AI wrapper game (and where the money actually is)
Original: AI's Middle Layer: Where the Real Money's Made (or Lost) in the Wrapper Economy
Summary
This blog post reveals the untapped potential in the "wrapper economy" – the lucrative middle layer where AI-powered tools and services are packaged and sold. Analytics professionals can uncover hidden revenue streams and gain a competitive edge by understanding the dynamics of this rapidly evolving market, leveraging insights on successful monetization strategies and identifying critical points where AI-powered "wrappers" can make or break a business's bottom line.
Who This Is For
Business Analysts
Product Managers
Founders
Key Takeaways
- Understanding the four main types of AI wrappers: vertical agents, horizontal copilots, orchestration frameworks, and safety rails
- Token processing costs have dropped 90% in 3 years, but wrapper companies still maintain ~50% gross margins
- Platform kill-zones occur when major players like OpenAI or Google release updates that eliminate wrapper startups overnight
- Strategic defense requires building data moats, deep workflow integration, and using multiple LLM providers including self-hosted models
- The EU AI Act will reshape the wrapper economy with high-risk obligations kicking in 2026-2027
Tools & Technologies
OpenAI GPT models Google Bard/Gemini Anthropic Claude LangChain LlamaIndex Pinecone Microsoft 365 Copilot GitHub Copilot Harvey AI BloombergGPT Guardrails PromptLayer Meta LLaMA Mistral AI
Topics Covered
business-models pricing-strategy monetization
Ready to dive deeper?
Read Full Article on julianajackson.substack.com
