---
title: "A CEO of AI Applications Marks a New Era of AI Competition"
description: "Explore how AI leaders compete through personalization and applications, as OpenAI's new CEO of Applications signals a shift toward platform stickiness and user retention."
categories: ["AI","trends"]
keywords: ["OpenAI","AI competition","personalization in AI","Fidji Simo","AI applications","user retention strategies","MidJourney","Google AI","foundational models"]
ai_summary: "Explore how OpenAI's new CEO of Applications signals a shift in AI competition focused on personalization and user retention."
date: 2025-05-08
lastmod: 2026-07-30
canonical_url: https://www.tomtunguz.com/era-of-ai-lockin/
author: "Tomasz Tunguz"
---

With models rapidly commoditizing in performance, we are seeing different strategies for keeping users on the same models.<sup>1</sup>

- MidJourney is asking users [to personalize their models](https://docs.midjourney.com/hc/en-us/articles/32433330574221-Personalization)
- OpenAI [has developed a memory](https://openai.com/index/memory-and-new-controls-for-chatgpt/)
- [Google is offering free-fine tuning](https://ai.google.dev/gemini-api/docs/pricing) as a way of winning share & locking in demand
- OpenAI has hired [Fidji Simo](https://openai.com/index/leadership-expansion-with-fidji-simo/) as CEO of Applications

Ultimately, personalization &  applications are likely to be the two vectors by which foundational model companies compete. 


A model remembering your name, optimized to your codebase, having a knowledge of your previous work & refashioning itself to the way you work : those are reasons for loyalty, even if the model isn't state of the art. Like airplane reward programs, personalization & memory introduce switching costs that may outweigh the benefits of state-of-the-art models.

Fidji's hiring & role suggest Applications for OpenAI are of paramount importance. 

The title CEO of Applications implies Fidji will be the head of a substantial & strategic business unit & OpenAI will evolve to a holding company structure - like Sundar's Alphabet with a CEO of Waymo (actually co-CEOS!) & YouTube (Neal Mohan) for example.

The personalization of the model within an application & workflow will be the ultimate moat. OpenAI's recent leadership hire makes plain how large the opportunity is.

---
<sup>1</sup> A recent [paper on AI competition](https://andreyfradkin.com/assets/demandforllm.pdf) suggests that newer models are rapidly adopted by customers. Sometimes newer models sap share from competitors, other times replace previous versions (Claude 3.5 users upgraded to 3.7), last new models expand usage (Gemini Flash & 2.5).