In early 2025, education tech giant Chegg made headlines—again—for all the wrong reasons. The company, once a go-to platform for homework help and online tutoring, blamed Google’s AI-generated summaries for gutting its search traffic. That collapse led to a staggering 90% drop in stock value. Just weeks later, Chegg laid off nearly a quarter of its workforce. But Chegg isn’t an isolated case. It’s simply the most visible victim of a much larger disruption: AI is silently erasing entire categories of startup ideas before they ever get off the ground.
For years, founders built companies by understanding search behavior. Type a keyword, optimize for SEO, rank high on Google, drive traffic, convert users. But that playbook no longer works. In the era of ChatGPT, Perplexity, and Gemini, users don’t search — they prompt.
The Shift From Search to Prompting
In 2024, the way we access information changed forever. People stopped clicking through ten blue links. Now, they ask one question and get one answer—direct, instant, and tailored. Whether it’s “how to cancel a subscription” or “explain Bitcoin like I’m five,” tools like ChatGPT deliver the goods in seconds. No blog posts. No ads. No scrolling.
This behavior has created a domino effect across the startup landscape. Many digital products once seen as helpful—name generators, calculators, explainer blogs, even lightweight SaaS tools—are now trivialized by a single prompt. You don’t need a separate app to draft a cold email or plan a Tokyo trip on a budget. You just ask, and AI delivers.
In fact, what used to be full-fledged businesses are now micro-moments inside a chatbot. This isn’t competition. It’s consolidation at the prompt level.
Entire Product Categories Are Being Abstracted
Let’s be blunt: AI doesn’t just kill bad ideas. It’s eliminating good ones too—because it can deliver similar outcomes faster, cheaper, and friction-free.
If your business helps users summarize books, plan meals, fix code, or create cold emails, chances are you’re already obsolete. Not because people don’t need those things—but because they can now get them instantly from an AI assistant without ever leaving the interface.
Some of the startup categories most at risk include:
- Business name and slogan generators
- Blog-style educational explainers
- Affiliate product roundup sites
- Simple SaaS tools for emails, resumes, or policy templates
- K-12 quiz and worksheet creators
- Developer help blogs for error lookups or syntax tips
These aren’t declining because of fierce competition. They’re being consumed by AI without fanfare.
AI Is Restructuring Entire Industries
It’s not just side projects or bootstrapped tools feeling the squeeze. Billion-dollar markets are being quietly redefined. AI now generates marketing copy, offers financial planning suggestions, summarizes legal documents, and even assists in healthcare triage. From e-commerce product previews to coding support, AI is slipping into places startups once claimed as their niche.
Yet, despite the disruption, there are still areas where AI hasn’t taken over—and likely won’t anytime soon. These include:
- In-person local services like plumbing or salon visits
- Regulated fields where liability is key (finance, law, healthcare)
- Human-centered domains like mental health, therapy, or coaching
- Communities where trust, taste, and interaction matter (Reddit, Slack)
- Physical execution layers of commerce (inventory, shipping, payments)
Even as AI improves, many of these fields depend on human nuance, emotional intelligence, or physical presence—making them harder to automate.
Don’t Just Build. Build What AI Needs
Many founders are still playing the old game, hoping better branding or niche targeting will give their product an edge. But in this new environment, surviving means outgrowing the prompt.
Here’s how smart founders are staying relevant:
1. Real-Time Data Beats Static Tools
AI can remix existing info, but it struggles with live, real-time feeds. If your startup integrates changing data—like pricing, weather, traffic, or events—you’re ahead of the curve.
2. Human Connection Still Wins
AI can simulate conversation but can’t replace real trust. Communities built on people—user forums, expert advice, peer reviews—will remain vital.
3. Own the Transaction
AI can suggest what to buy. But it can’t close the loop. If your platform handles bookings, purchases, or financial transactions, you control the action, not just the information.
4. Become the Source
Rather than competing with AI, fuel it. Provide curated, verified, or exclusive data that AI tools pull from. Being upstream is powerful.
5. Build Infrastructure for AI
The next wave of winners will be the companies that power AI—not just those trying to fight it. Think APIs, agents, databases, and tools that large language models depend on.
Filter Every Idea Through the Prompt Test
Ask yourself: Can a user get this with one prompt in ChatGPT? If the answer is yes, that idea is already under threat.
Here’s what you should be asking before building:
- Can this be instantly generated or completed inside an AI chat?
- Does my product rely on human trust, context, or emotion?
- Do I deliver something time-sensitive or live?
- Is my product part of an ecosystem AI tools need to function?
- Am I enabling action, not just delivering answers?
If your startup stops where the prompt ends, you’re already behind. But if it begins where the prompt fails—where complexity, emotion, trust, or transaction begin—you’re building something AI can’t fully replicate.
