Core Insights - The rapid expansion of foundational model providers is likely to crush almost every AI application layer startup, as highlighted by Yishan Wong, former CEO of Reddit [2][3] - A recent survey revealed that 73% of 200 AI startups that secured funding within six months are merely "shelling" third-party APIs, with ChatGPT being the core technology [5][6] - Only 18 out of the 200 startups are genuinely innovating in technology, raising concerns about the authenticity of claims made by many companies in the AI sector [5][8] Group 1 - The analysis conducted by Teja Kusireddy involved monitoring network traffic, reverse engineering code, and tracking API calls to assess the actual technological capabilities of AI startups [6][12] - 12 companies were found to have exposed their API keys in frontend code, indicating a lack of awareness about security practices [7][43] - The disparity between marketing claims and actual technological implementation is alarming, with many companies misrepresenting their capabilities [8][54] Group 2 - The investigation revealed that 73% of the startups have significant gaps between their claimed technology and actual implementation, with some companies charging exorbitant prices for basic API calls [11][20] - Companies claiming to have proprietary models often rely on existing APIs like OpenAI's, leading to inflated costs and misleading marketing [15][19] - The true cost of using these APIs can be significantly lower than what companies charge their customers, indicating a high markup on services [31][35] Group 3 - The research identified three main patterns among AI startups: those falsely claiming proprietary models, those using common RAG architectures without acknowledgment, and those misrepresenting their model fine-tuning efforts [24][36] - The majority of companies do not genuinely train their models from scratch, with only 7% truly investing in original model development [36][39] - The findings suggest that many AI startups are essentially service-oriented businesses that have replaced human labor with API costs, which is not inherently negative but should be transparently communicated [58][64] Group 4 - The current landscape of AI startups is characterized by a lack of transparency, with many founders feeling pressured to exaggerate their technological capabilities to attract investment [54][67] - The call for a "transparency era" in the AI sector is emphasized, urging companies to be honest about their technology stacks and focus on user experience [64][66] - The investigation concluded that the ability to replicate a startup's core technology within a short timeframe is a key indicator of whether it is merely an API wrapper [57][68]