Which business moats will still matter in the age of AI?

In the age of increasingly sophisticated AI agents, certain business moats that investors rely on may become less significant. A strong moat typically arises from an indispensable, hard-to-replicate element like a unique product or valuable intellectual property. However, some businesses maintain their competitive edge by making switching inconvenient for customers. These behavioral moats might be at risk as AI agents become more capable and widely adopted.

Personal AI agents have the potential to erode consumer inertia, prompting a reevaluation of companies' advantages. For instance, financial services firms, where consumers frequently switch accounts due to better interest rates or features, could see reduced switching barriers. AI agents could easily compare savings rates, credit card rewards, and brokerage products, ultimately guiding users to better alternatives.

As a result, banks like Charles Schwab are taking precautions to control access to AI agents and focus on developing controlled interfaces to their platforms.

Similarly, businesses in other sectors, such as insurance, are adapting to the potential impact of AI agents. Kin Insurance has welcomed AI shopping agents and developed tools to assist agents in obtaining insurance quotes. Insurify has also launched an AI Agent Gateway to help agents gather and compare real-time quotes while retaining critical policy details like deductibles and coverage limits.

As these AI-powered tools become more prevalent, companies may need to enhance their offerings to remain competitive or find alternative ways to maintain their moats.

In the realm of subscription services, consumer inertia is a significant factor. Many individuals forget to cancel subscriptions they no longer use, leading to lost revenue opportunities. A 2025 study in the American Economic Review found that cancellation friction can increase seller revenues by roughly double when starting subscriber bases remain constant.

An AI agent could help mitigate this issue by regularly monitoring recurring charges, assessing usage, and prompting users to cancel unnecessary subscriptions. This development could put pressure on subscription-based businesses, forcing them to refine their cancellation processes or improve the overall customer experience.

In summary, the rise of AI agents presents both challenges and opportunities for businesses with diverse moats. While some industries, such as financial services and insurance, may face reduced switching barriers due to AI agents' capabilities, others, like subscription services, could see increased cancellation rates. Ultimately, the success of companies will depend on their ability to adapt to this evolving landscape and leverage their unique strengths to maintain competitive advantages.