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An Interview with Benedict Evans About AI and Software. Benedict Evans articulates a great insight really well here: LLMs might be a real threat to recommender system moats.

The playbook to build a flywheel has been the following: build a platform, measure engagement data, find patterns, and make better recommendations to attract more users. That's the network effect that made Google, Meta, and Amazon so hard to compete with. But LLMs have a compressed representation of that same knowledge from training on vast amounts of the internet, without having to measure engagement of real users.

To overcome the cold-start problem, you don't need years of engagement data anymore. Now you can just give an LLM some context of a user, for example their social media profile, to get high-quality recommendations. It's a fundamentally different entry point to personalization, one that doesn't depend on scale.