The New Moat: Memory
A Massive Win for AI Products
“Memories, even your most precious ones, fade surprisingly quickly. But I don’t go along with that. The memories I value most, I don’t ever see them fading.”
― Kazuo Ishiguro, Never Let Me Go
OpenAI's memory upgrades signals the start of what may become the most transformative shift since GPT-3’s debut.
Until now, AI has felt like chatting with a brilliant but forgetful friend. The absent-minded professor type who'd crush it on Jeopardy but never remembers your birthday.
Memory is the breakthrough that changes everything for enterprise and consumer AI—marking the end of manual prompting and the start of truly personalized, proactive experiences that anticipate your needs and take action.
Research from Stanford's AI Lab indicates that memory-enabled systems demonstrate a 62% improvement in task completion rates for complex, multi-session projects. In other words: embrace memory, and you’ll get a lot more done.
AI will now remember the details that make you you—your habits, your thought patterns, your preferences—and become a lifelong companion and assistant.
If this sounds like a Black Mirror episode, that feeling won’t last. The productivity gains from giving AI more context and personal data will be too big to ignore.
Personalization: the new network effect
From an investment perspective, memory challenges the frequently repeated Silicon Valley belief that AI lacks defensibility. Spend five minutes at a Bay Area investor dinner and you'll hear that take. Lazy thinking.
OpenAI and others who win memory will unlock retention, defensibility, and the most powerful network effects we’ve seen since social graphs.
Memory, and the deeply personal context that comes with it, will make Facebook Connect’s 2008-era social graph look primitive.
OpenAI is perfectly positioned to introduce a "Sign in with OpenAI" product, enabling third-party developers to tap directly into its memory layer.
If Facebook Connect was about who you knew and your surface-level likes, memory is about who you are and the deepest thoughts you carry every day.
Work goals. Relationship doubts. Health concerns. Every passing thought, every quiet worry.
Of course, OpenAI will build many of these apps themselves. Their insane product velocity right now is increasingly focused on the application layer.
Founders need to shift gears. The game isn’t about spinning up ChatGPT wrappers or testing narrow use cases anymore.
It’s a war to capture memory faster than everyone else.
Shout out to my writing friend signüll, who dropped a piece this morning that’s worth your time if you’re interested in diving deeper: memory is the deepest moat.
lovely!
Brilliant piece Jeff. The memory moat thesis is spot on, but there's an interesting twist emerging:
The data we are observing is clear - users who experience memory-enabled AI show dramatically higher retention and engagement. But paradoxically, the strongest moat might not come from locking memories inside one AI assistant.
Think of memories like your digital consciousness - you'll want them to flow seamlessly across different AI tools and apps, just like your thoughts aren't confined to one conversation. The Model Control Protocol (MCP) trend signals this future.
The real moat will be built by whoever makes memories both powerful *and* portable. Users who experience the magic of AI that truly knows them won't go back - but they'll demand control over their digital minds.
Memory isn't just a feature, it's fundamental infrastructure for the AI era. And users will gravitate to systems that enhance their agency rather than diminish it.