AI Companies Must Build Consumer Products Too — Lessons from Musk, Altman, and Srinivas

A new wave of strategic thinking is emerging in the AI industry, one that may shape which players survive and thrive. It’s not just about building large AI models or delivering APIs to developers. Increasingly, the future belongs to those who can build and integrate AI into consumer-facing digital products. This convergence of AI software and consumer software is likely to separate the one percent of surviving, profitable AI companies — as Vinod Khosla puts it — from the 99 percent that flame out.


Three signals that has emerged over the last few months point in this direction. First, Aravind Srinivas, CEO of Perplexity AI, announced that his company's AI-powered internet browser will be no ordinary internet browsing tool, but a productivity engine. He said it will soon replace two white-collar job categories: recruiting/staffing and administrative assistants. That’s a bold claim, but it reflects a deeper shift. By integrating AI with the browser — one of the most widely used digital tools — Perplexity is attempting what Google Chrome never did: merging AI-native thinking directly into the browsing experience.

Second, Sam Altman. The rumors around his possible interest in building a social media product — even if unconfirmed — make sense in this new AI economy. Because whoever owns the user interface also controls the loop of user behavior, data feedback, and interface experimentation — which in turn strengthens their AI advantage. Altman’s OpenAI already offers ChatGPT -- but without a dedicated consumer product (like a browser, feed, or workspace app). Users open ChatGPT multiple times a day, there’s a ceiling to the stickiness of the engagement.

Elon Musk (can anyone ignore him?!) understands this phenomenon. His recent merging of the social media platform X with his AI startup xAI is proof of this. With this merger, he upgraded xAI from an AI company to an AI+product company. News-wise, it didn't elicit much senation (since Musk continued to retain control over both the products), but technology-wise, I think, it was a paradigm shift in the Musk empire. 


However, this trend is not quite new in the broader tech industry. Companies like Google (with Search and YouTube), Microsoft (with Edge and LinkedIn), Meta (with Instagram, WhatsApp, Facebook), and even Ola Krutrim (with Ola Cabs, Ola Maps, Ola Electric) are thinking ahead. Each of them has both consumer platforms and AI stacks — and are working overtime to bring the two together.


Why does this matter? Because in the end, the winners in AI won’t just be the ones with the smartest models. They’ll be the ones with sustained user attention. Attention breeds usage; usage breeds data; and data breeds better AI.


India, too, is at a turning point. Sarvam AI’s selection for government support to build a foundational Indian LLM is a major milestone. But unless such Indian players also start developing or partnering on consumer digital products — especially apps or platforms used by tens of millions of Indians — their AI offerings may remain backend utilities. Compare that to Jio, which has deep integration across telecom, apps, content, and payments. It’s not hard to imagine a scenario where Jio develops its own LLM or conversational AI system tailored for Indian users and deploys it across its digital empire.


In the SaaS world too — whether Zoho, Freshworks, or TCS — we may begin to see a similar trend: not just offering AI as a feature, but developing product suites where AI is central to the user workflow and interface.


The bottom line? We are entering an age where AI companies must also become product companies. Those who don't may end up like early internet infrastructure firms — crucial but commoditized.


Musk's X-xAI merger, Altman’s possible consumer-facing product launch, and Srinivas’s smart browser endeavour are early but clear signs. This is not just the AI race. It’s the AI+Product race, on a global scale. And it’s already begun.

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