- Company — Collectively: the document-chat, PDF-summarisation, AI-writing and single-prompt-tool companies launched 2022–23
- Sector — AI applications
- Founded / Died — Mostly 2022–2023 / mostly 2023–2025
- Lifespan — Typically 6–24 months
- Capital raised — Mostly bootstrapped, pre-seed or seed. SimpleClosure's 2025 shutdown data puts the median capital raised by shutting-down AI companies at ~$2.4M, below the ~$2.8M overall median.
- Peak scale — Typically thousands to low tens of thousands of users; MRR from hundreds to low tens of thousands of dollars.
- What it built — Interfaces over a third-party model for one task: chat with a PDF, summarise a document, generate marketing copy, write SQL.
- Stated cause of death — Where founders wrote anything, the dominant stated cause is "OpenAI shipped it." The reference event is OpenAI DevDay, 6 November 2023, when ChatGPT gained native file upload and document analysis; a widely circulated comment at the time was "many startups just died today, because OpenAI added PDF chat."
- Evidenced cause — Partial divergence; the honest version is less flattering. The feature release was real and destroyed some businesses overnight. But these products had no proprietary data, no workflow lock-in, no distribution advantage and no switching cost — three or four weeks of engineering any competitor, including the model provider, could replicate. Most were not killed by DevDay; they were revealed by it. Many died more slowly of inference-cost economics: flat-rate pricing against variable per-token costs produces negative gross margin on the heaviest users, who are also the least likely to churn.
- Warning signs visible earlier — Retention curves that flattened near zero after month one. A feature list identical to a dozen competitors. A cost of goods sold that rose with usage.
- Money outcome — Small. Mostly founders' own time and small angel cheques. Some founders did extremely well on the way (several reached $10k–$100k MRR before the collapse) and exited with cash.
- Post-mortem quality — Variable and thin. A handful of good Indie Hackers and X threads; mostly silence. AI represented 15.9% of all documented startup shutdowns in 2025, per SimpleClosure, with wrappers and apps dominating the composition — so the volume is real even where the documentation is not.
- Transferable lesson — The genuinely transferable version is not "don't build wrappers" — several wrappers became large businesses. It is: ask what you will own after the model improves by an order of magnitude. If the answer is "the UI," you have a product with a known expiry date, and the correct strategy is to extract cash quickly rather than raise on it.
- Sources — SimpleClosure, State of Startup Shutdowns 2025 · TechCrunch on DevDay's PDF feature · TechCrunch on 2025 shutdown rates
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