# Buying the business beats selling the bot _Long Lake's Prathik Naidu tells AI Engineer why owning services businesses beats selling AI tools, and how AI gives services software-like margins._ **Published:** 2026-10-19 **Source:** https://www.startuphub.ai/ai-news/artificial-intelligence/2026/buying-the-business-beats-selling-the-bot --- Selling AI is the hard way to capture AI value. That is the argument [AI Engineer](https://www.youtube.com/watch?v=J7n3WJnFTto) heard from Prathik Naidu, founding partner at Long Lake, who said the better strategy is to buy the business and own the outcome. I think he is right for a specific slice of the economy, and that slice is enormous. Naidu described the familiar outside-in slog. You find a pain, build an agent for one narrow use case, then hit security review, 20-year-old systems, and the adoption fight over whose job it is to drive usage. Even if you land a seven-figure contract, he said, you may have created $5 million a year in EBITDA for the client, which at what he called a roughly conservative 10x multiple is $50 million in enterprise value that accrues to them, not you. The model got cheap. The capture did not. Ownership, in his telling, fixes the plumbing. Naidu said Long Lake is an applied AI holding company that has raised $7.5 billion in capital from Elad Gil, General Catalyst, Alpha Wave, D1 and others, started about three years ago, and now partners with 40 businesses with a 55-person team across technology, finance and operations. The pitch is access, data and incentive alignment: your engineers sit with the veterans who hold the tacit knowledge, every live task and edge case becomes training signal, and you win only when the business wins. He pointed to the recent $6.3 billion take-private of Amex GBT to enter corporate travel as the model at scale. For engineering and ops leaders, the workflow change is literal, fly to Minneapolis, Portland or London, map the full operation not one workflow, and fund a deployment team whose job is not seats sold but revenue per employee and service quality. The economics make the point concrete. Naidu contrasted software, where he said $100 of incremental revenue leaves about $80 after delivery, with services, where $100 leaves about $20 because you hire, train and manage for every new client. He called that an 80% marginal tax on growth that pushes founders to stop chasing scale even in what he described as a $70 trillion global services market versus a much smaller software market. AI, he argued, breaks the link between labor cost and revenue, giving services businesses software-like operating leverage if you deploy across the whole operation and then put the freed capacity to work on growth and customer experience. The path is a J-curve, he said, you invest in platform and workflow capture, you get time savings and high usage, then you must convert that into P&L impact. That last step is the hard one outside-in sellers rarely control. Building an AI-native firm from scratch can do the same end-to-end job and Naidu called it a valid and exciting strategy. The concession matters. You own the P&L that way too, and you avoid an M&A funnel that, by his own numbers, sees about 5,000 deals a year to pick a few. But he argued distribution, brand trust and scarce expertise favor incumbents in mission-critical services where clients buy outcomes and accountability, not drafting help. Long Lake says it filters for businesses where customers trust the firm with end-to-end outcomes, human judgment matters, and regulation demands accountability, from handling an urgent leak for an HOA to a complex tax decision to rebooking travel after a disruption. If you do not meet that bar, buying does not help. If you are deciding how to sell AI next quarter, budget for ownership or partnership, not just tokens and seats. And if you asked me whether to sell or buy, I would say this: sell the tool if you can own the workflow, buy the workflow if you want to own the value. --- Original analysis from [startuphub.ai](https://www.startuphub.ai), the #1 AI startup directory. © StartupHub.ai. All rights reserved. You may not republish this article in full without a license. Search engines and AI research tools may crawl and summarize for reference. Bulk reproduction or model training on this content requires a license. See https://www.startuphub.ai/terms.