To Get AI Into Ordinary Businesses, Buy the Operator

After publishing The Vertical AI Playbook, the authors came back with a follow-up case study to explain a strange split. In some corners of the economy, the future had already arrived. Companies were writing half their computer code with AI, law firms had trimmed parts of their staffs by about 10% because of it, and AI startups were reaching large revenues in months. Elsewhere, AI was stalling, with 42% of AI initiatives discontinued in 2024. The problem, they argued, was that AI often demands a new way of handling data and daily work, and many ordinary businesses were not equipped to make that change.

Their answer was blunt. “Instead of selling AI to the end operator, companies are buying the end operator and leveraging AI themselves,” the authors wrote.

By that they meant two related moves they had seen. Most AI buyers they studied either bought an existing operator and added AI, or built a new AI-powered operator from zero. Those buying or building approaches, they wrote, are “less about go-to-market strategy and more akin to a delivery mechanism for a drug.” In plain terms, the drug is AI and ownership is how you get it inside the business.

Their extended example was QXO, a buyer of businesses founded in 2023 to modernize the distribution of construction materials, the local warehouses and truck fleets that deliver shingles and siding to contractors. Most of the other companies in the playbook first proved that their technology created value and then acquired businesses. QXO reversed the order, the authors wrote. It bought first, gaining immediate revenue, a national distribution network, and a credible platform, and then began bringing current tools to a trade that still did little digitally.

Ownership, they argued, gives control to install automated tools and impose common routines from the inside. They pointed to a parking example as similar. Just as parking startup Metropolis modernized the branch based operations of SP Plus, an operator of lots and garages, after acquiring it, QXO could impose common systems because it owned the distributor.