Opinion
AI is shifting the moat from technology to positioning
The AI era is shortening the lifespan of product differentiation and increasing the value of category leadership, market position, and customer perception.
At Google I/O 2026, Google announced what may be the most significant change to search since its creation. Instead of simply returning links, search is evolving into an experience that provides answers, reasoning, and recommendations. As AI increasingly interprets information on behalf of users, it is fundamentally changing how companies are discovered, compared, and ultimately chosen.
Much of the discussion surrounding this shift focuses on SEO versus GEO, but that framing misses the larger issue. What appears to be a search challenge is actually a strategy challenge.
AI is exposing a strategic weakness many technology companies have lived with for years: an inability to clearly explain what makes them different, which category they belong to, and why customers should choose them over competing alternatives.
Unlike human buyers, AI systems do not browse websites casually. They summarize, categorize, compare, and synthesize information from multiple sources before a prospective customer ever visits a company's website. As a result, an AI model may already have formed an opinion based on customer reviews, analyst reports, media coverage, social platforms, and third-party mentions.
This matters because AI has little tolerance for ambiguity. A company described as "an AI-powered platform helping enterprises accelerate digital transformation" may sound impressive, but it says very little about what the company actually does, who it serves, what problem it solves, or why it should be chosen over alternatives.
The shift is already measurable. One 2026 study found that Google's AI Overviews appeared in 51.5% of representative searches, while another found that nearly 30% of the sources cited by Google's AI-generated answers did not appear on the first page of search results.
The implication is significant: ranking on the first page no longer guarantees inclusion in the answer. Visibility increasingly depends on whether AI systems understand what a company does, where it fits, and when it should be recommended.
The urgency is clear - Google is not describing a future vision. These capabilities are already rolling out at scale. Companies that wait for traffic or lead generation to decline before responding may discover that AI systems have already established a market narrative about them.
The rise of AI search reveals something much bigger than a change in discovery. It is reshaping the source of competitive advantage itself.
For decades, technology companies built their moat by creating products competitors could not easily replicate. AI is changing that equation. As software becomes faster and cheaper to build, technological advantages are becoming harder to defend and easier to match, shortening the lifespan of product-based differentiation.
This is precisely why market position is becoming more valuable. While competitors may copy what a company builds, they cannot easily replicate the place it occupies in customers' minds. Companies that establish a clear association with a category, business problem, or outcome create trust, recognition, and preference that extend beyond any individual feature.
As technologies evolve and products inevitably change, customer perception tends to endure, making market position one of the few advantages that becomes more valuable over time. In an AI-driven market, where recommendation engines increasingly influence discovery and evaluation, that perception is becoming one of the most defensible assets a company can own.
What Should Companies Do Now?
The good news is that this challenge can be solved. At its core, it is not a technology challenge but a strategic one, specifically a market-positioning challenge, an area where companies have far more control over the outcome than they might think.
As search evolves from keywords to natural-language questions, companies need to become significantly more explicit about three things: the category they belong to, the business problem they solve, and the customers they serve. They also need to ensure that their company appears across as many credible sources as possible, because these are increasingly the signals AI systems rely on to understand, evaluate, and recommend businesses. This requires more than better messaging or more effective use of marketing assets. It starts with strategic clarity and a deliberate decision about the category you want to lead, or whether you need to create a new category altogether, rather than allowing competitors, analysts, or AI systems to define it for you. Companies must establish a clear association between their product and a business problem, instead of describing themselves through a collection of features and technical capabilities.
Just as importantly, companies need to recognize that AI systems do not rely solely on corporate websites and marketing materials. They learn from a broader network of signals that includes customer reviews, analyst reports, media coverage, strategic partnerships, conference appearances, and executive thought leadership.
In other words, what others say about your company is increasingly becoming as important as what your company says about itself.
This reality elevates the importance of a broader go-to-market strategy. Strategic partnerships, customer advocacy, executive visibility, media coverage, and third-party validation are no longer simply branding initiatives. They are becoming critical inputs into how AI systems understand, categorize, and recommend companies.
For years, search engines rewarded companies that knew how to get found. That era is coming to an end. The AI era will reward companies that operate from a clear strategy, define the category they want to lead, establish a distinctive market position, and consistently reinforce that position through every signal they send to the market. The companies that successfully incorporate this shift into their strategy and operating plans will be the ones most likely to thrive.
Revital Kremer is a strategy consultant and growth advisor.
