> I genuinely don't understand what value Cursor itself brings. It's like a wrapper for some APIs, right? As far as I can tell there's like four actual AI firms in the world and everyone else is trying to whitelabel. It reminds me of the hosting industry in the early 2000s.

Yes, there's (maybe?) four, but they're at the very bottom of the value chain.

Things built on top of them will be higher up the value chain and (in theory anyway) command a larger margin, hence a VC rush into betting on which company actually makes it up the value chain.

I mean, the only successes we see now are with coding agents. Nothing else has made it up the value chain except coding agents. Everything else (such as art and literature generation) is still on the bottom rung of the value chain.

That, by definition alone, is where the smallest margins are!