Vertical AI application products generate gross margins around 30%
Nathan Benaich · State of AI 2025 with Nathan Benaich: Power Deals, Reasoning Breakthroughs, Real Revenue · Oct 30, 2025 · at 11:54
Nathan Benaich, GP at Air Street Capital, discusses the compressed unit economics of vertical AI startups relying on third-party model APIs.
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“There are cases where these kind of vertical products are making margin, gross margins of like 30%, and sometimes they get worse with scale.”
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