Every model upgrade makes AI apps cheaper to run, and easier for customers to replace. Still, 94% of enterprise LLM buyers expect their spend to rise. Three rules for winning that spend over the build-it-yourself option: 1. Operate the workflow better than the customer can 2. Make context cheaper to rent than to rebuild 3. Prove the value, then price to capture it Who's doing it: - Legal AI platform Harvey beat a general-purpose AI assistant and energy giant Repsol's own in-house tool in a blind test - Notion considered building its own support AI, then bought Decagon’s AI support agents so its team could stay focused on the core product "Model progress continually improves the customer's alternative. Your advantage must widen faster for the application to keep earning its premium." Full piece from a16z's Tugce Erten: https://www.a16z.news/p/how-ai-applications-earn-their-premium