FICO changed their licensing model and two public companies lost 10-20% in a single day. ChatGPT launched shopping with Shopify. 

European founders are fleeing to San Francisco. 

These look unrelated - but they're all the same story: Infrastructure owners are systematically eliminating middlemen.

Story 1: How FICO destroyed $5 billion in market cap overnight:

• FICO launched "Mortgage Direct License Program" - boring name, brutal market reaction
• Equifax stock dropped 8.4%, TransUnion crashed 10.1% in single trading session
• For decades: FICO charges bureaus ~$5 per score → Bureaus resell to lenders for $10 (100% markup)
• FICO said "we're going direct to lenders, cutting you out" - new price $4.95 per score (50% reduction)
• US mortgage industry is $12 trillion - FICO owns IP, scoring model, algorithms
• Credit bureaus don't own anything valuable - just gatekeepers with smart markups

Why I had to shut down SimpleDirect Financing:

• Announced sunsetting after 4 years because we didn't own end-to-end experience
• We were middleman - sent data to lenders who made final decisions (sometimes instant, sometimes 1-2 days)
• Merchants asking what's going on, homeowners asking what's going on - stuck connecting info in silos
• Problems weren't our fault but we took the heat
• As volume increased: Created silo business, never going to make customers happy, just volume-sending machine
• If you don't own IP, just reselling someone else's API - always at risk

The Credit Karma problem:

• Don't work with FICO directly - work with Equifax/TransUnion
• Those agencies can increase prices, make access harder, introduce new requirements
• Always at mercy of other people's decisions - that's the middleman trap

Story 2: ChatGPT and Shopify just killed Google Ads:

• OpenAI + Shopify announced instant checkout inside ChatGPT
• Ask for product recommendations ("cool sunglasses for Europe trip") → instant Shopify merchant recommendations
• Check out right in chat - no leaving conversation, no merchant website, no account creation, no re-entering card info
• Shopify stock jumped 6% - connecting 1M+ merchants to 700M weekly ChatGPT users
• Calling it "agent commerce" - AI agents as personal shoppers handling entire purchase flow

The Amazon vs Shopify problem just got solved:

• Amazon benefit: Traffic (most visited website, even page 6 products get sales)
• Shopify problem: Own the tech but handle marketing yourself (hard for most merchants)
• Shopify now gives merchants access to 700M weekly users without Google/Facebook/Amazon fees
• Who loses: Google Ads, Facebook Ads, Amazon marketplace fees - all the middlemen taking revenue cuts

But AI desperately needs to monetize:

• ChatGPT, Claude, Gemini, Grok all offer free tiers - training costs hundreds of millions to billions
• Running them costs money on every single message sent
• Answer has been "VC money, Saudi/UAE/Qatar billions" but can't last forever
• Elon's xAI adding ads in Grok, ChatGPT testing commerce - all desperate to monetize
• I pay Claude $20/month for heavy coding use, ChatGPT $20/month for daily use (dozen+ times/day)
• Value I get worth way more than $20 but they won't raise prices yet due to competition

Founder friend's startup insight:

• Building company that works with AI platforms + advertisers to inject ads in LLM responses
• Early/frontier stage, working with smaller AI companies desperate to monetize
• But ChatGPT/Claude/Gemini/xAI figuring it out too - with direct distribution advantage
• They can cut out middleman and work directly with advertisers

Story 3: European founders fleeing to America:

• Wall Street Journal: US investors now dominate European AI funding - 71% of deals by value (up from 57% last year)
• European founders doing "Delaware flips" - live in Europe, set up US holding companies for American capital
• One founder: "In London, we'd get half our valuation. In Silicon Valley, investors understand market potential"
• Another raised $500K in SF within a week - had been trying months in London

Why infrastructure wins (my experience from both sides):

• I'm from Canada - run companies in both Canada and US, understand this intimately
• Canadian VCs don't lead rounds - only write support checks after you find US lead
• My thought: Why would I need you if I can find US lead investor? I'll just find US supporting investors who treat me better
• 2022 attempted VC raise: Lead from San Francisco, secondary from New York
• Those guys had money, understood, were risk-takers - wrote $250K angel checks as side thing while running own companies
• Canadian VCs kept asking "Do you have American investors? Do you have lead?" - their LPs won't let them write checks without lead first

US investors vs everyone else:

• Sequoia, a16z, Y Combinator built infrastructure for GLOBAL founders (not just US)
• Write bigger checks, move faster, sometimes commit capital within days
• European/Canadian VCs: Slower, more conservative, smaller checks
• Not just about money - it's about SPEED (in AI, speed beats competitors)
• European funds take months, American funds take weeks

The clear pattern across all three stories:

• FICO: Companies owning IP eliminate markup - bureaus don't own score so got cut out
• ChatGPT/Shopify: Commerce infrastructure eliminates website friction - LLMs become new storefront
• US vs EU capital: Funding infrastructure eliminates slow inefficient middlemen - founders flee to best infrastructure

What this means for your startup - the middle ground is dead:

• Can't be successful as just marked-up reseller
• Can't be slow local fund
• Can't be just website trying to capture traffic
• LLMs, AI, infrastructure owners, IP owners - all squeezing middlemen out

Your two options:

Option 1: Be the infrastructure owner

• Own the IP, algorithm, core value creation
• Be FICO, don't be credit bureau
• Doesn't take years - start now by owning end-to-end experience
• Don't leave core customer experience to another API/provider (slow suicide)

Option 2: Be so lean you don't need middlemen

• Bootstrap as much as possible
• Build global teams (India, Middle East, South America, North America)
• Optimize for efficiency so you don't rely on gatekeepers (gatekeepers getting eliminated)

What you CANNOT be:

• Cannot build business depending on being channel between infrastructure and customers
• I personally made this decision recently - chose not to enter business like that
• Even if going well now, infrastructure partners will eventually squeeze you out
• Not "if" they'll squeeze you - it's "when"

The three critical questions to answer right now:

Q1: Do you own IP/algorithm or reselling someone else's?

• Happens more than you think - okay if answer reveals vulnerability
• If white-labeling or charging markup, you're vulnerable
• AI reducing risk/cost for IP providers to go direct

Q2: Are you destination or can ...