Google Exec Warns AI Wrapper Startups Could Be in Trouble

A Google executive is warning that two popular types of AI startups could be in trouble.

Darren Mowry, who heads Google’s global startup organization, told TechCrunch in an interview published Saturday (Feb. 21) that companies built around LLM wrappers and AI aggregators have their “check engine light” on.

Wrappers, the report says, are basically startups that wrap existing large language models (LLMs) such as ChatGPT with a product or consumer layer aimed at a specific use.

“If you’re really just counting on the back-end model to do all the work and you’re almost white-labeling that model, the industry doesn’t have a lot of patience for that anymore,” Mowry said, adding that wrapping “very thin intellectual property around Gemini or GPT-5” is a sign that a startup is not distinguishing itself.

“You’ve got to have deep, wide moats that are either horizontally differentiated or something really specific to a vertical market” for a startup to “progress and grow,” he said.

AL aggregators, as their name suggests, aggregate multiple LLMs into one interface or API layer to direct queries across models and offer users access to multiple models. The report gives the example of AI search startup Perplexity or developer platform OpenRouter, which give access to multiple AI models through one API.

Many of these platforms have done well, but Mowry argued that they are typically not seeing much growth now as users want “some intellectual property built in” to make sure they’re steered to the right model at the appropriate time according to their needs.

In other AI-related news, PYMNTS last week examined the way the emerging agentic AI dynamic is reconfiguring what product experience means in the B2B space.

“The digital shelf is no longer just a merchandising exercise; it is a data engineering challenge, one that is especially poignant for online marketplaces that must normalize supplier inputs, enforce taxonomies, and ensure interoperability across procurement, logistics and payment systems,” the report said.

Agentic commerce, PYMNTS added, collapses the standard separation between sourcing, contracting and settlement.

AI-driven procurement decisions rely on understanding not only what something costs, but how it can be financed, reconciled and reported in real time, meaning that payment terms, credit availability and settlement speed become critical inputs to the purchasing algorithm.

“If aggregation defined the first generation of B2B marketplaces and workflow defined the second, payments and data structure are emerging as the connective tissue of the landscape’s agentic-driven third act,” the report added.