But It Can and Should Reinforce the Ones You Already Have
An article in the MIT Sloan Management Review, “Why AI Will Not Provide Sustainable Competitive Advantage” opens with, “AI will transform economies and lift markets as a whole, but lasting differentiation will be built on human creativity and passion.” I see both sides of this argument but tend to agree. This thinking mirrors my favorite quote about AI so far, “It isn’t AI that is going to take your job or put you out of business, but a company or person using AI just might.” I would attribute properly if I knew who said it, but it seems to be on target based on what we are seeing so far.
The MIT article argues that while AI is transformative and powerful, it will not offer companies a sustainable competitive advantage. The core reason: AI is becoming increasingly accessible, commoditized, and standardized — much like previous technological revolutions (e.g., the internet or semiconductors). Over time, foundational AI capabilities — models, algorithms, hardware, talent, and even data — will become widely available. As a result, companies relying on AI itself as their key differentiator are likely to be disappointed.
Instead, the article stresses that residual heterogeneity — the unique elements beyond AI, such as business model innovation, customer relationships, proprietary context, and human creativity — will determine long-term competitive advantage. AI will be a powerful enabler, but not the source of durable differentiation.
My Perspective: AI Won’t Be the Advantage — But It Will Deepen the Ones You Already Have
I agree with the article’s core point: if your only strategy is to “use AI and win,” you’re likely chasing a mirage. However, I would argue that the authors underplay AI’s true strategic power — not as a standalone differentiator, but as an accelerator and amplifier of existing advantages.
AI is unlikely to create a moat by itself, but it can make your existing moat wider, deeper, and harder to cross. Companies that integrate AI to reinforce what already sets them apart — whether that’s operational excellence, customer intimacy, product innovation, data depth, or distribution strength — will pull further ahead of those that don’t.
For example:
- A retailer with deep loyalty data and a strong customer experience can use AI to personalize at scale, making the experience even stickier.
- A fuel logistics company with operational discipline can use AI to optimize its networks faster than competitors, capturing margin and arbitrage.
- A convenience or fuel brand with a powerful community can use AI to co-create content and reinforce emotional connections.
Yes, AI is a tool available to everyone — but how a company wields it depends on its culture, assets, and strategy. That’s where differentiation lies.
So while AI alone won’t be a silver bullet, companies that strategically integrate it into their existing strengths — rather than bolt it on — will gain a meaningful and durable edge.
