Companies building routers because it's fashionable puts them months behind fully focused players like OpenRouter, reducing user leverage and access to the full model ecosystem.
Alex Atallah argues that many companies are building LLM routers or gateways as a trend, but their lack of focus puts them far behind dedicated companies like OpenRouter. This limits users' leverage by not providing access to the full market of models and customizations. ✦ AI generated
Alex Atallah · 20VC · 2026-08-10 · original ↗
starts at this moment · 15:14
“You mentioned the immense time you spend on the routing technology that you have. Um a lot of people are thinking that we're seeing the commoditization of the routing technology. You're seeing Ramp release products like this. I mentioned earlier of Merge, company we invest in has released that product. Um several are releasing kind of routing technology similar or claiming to be similar. Are we seeing the commoditization of this layer?”
I think a lot Yeah, a lot of companies are making routers because it's fashionable. Um I think they're you know, they're seeing growth happen here and uh or they're they're making gateways at least. Um I First, I think there's two There's two issues with that. First, it immediately puts you in the mindset of copying instead of like, you know, winning something... Um and and immediately kind of like puts that gateway like many many months behind the companies that are fully focused on it. Like I am 100% focused on building the best router and gateway and and LLM marketplace and it shows in our product... Um the other problem is that it uh it reduces the leverage of all of your users. So, um like I really deeply believe in giving users and developers more leverage... you're you're kind of like being cut out. You're cutting out all your employees at your company of things that they they need.
verbatim transcript · starts at 15:14
14:54similar. Are we seeing the commoditization of this layer? >> I think a lot Yeah, a lot of companies are making routers because it's fashionable. Um I think they're [clears throat] you know, they're seeing growth happen here and uh or they're they're making gateways at least. Um I First, I think there's two There's two issues with that. First, it immediately puts you in the mindset of copying instead of like, you know, winning
15:23something. You're sort of you're playing to play or you're playing to exist rather than playing to win. Um and and maybe you're just trying to like play to serve your your existing customer base. Uh and you you want to see some AI growth happen. Um >> [snorts] >> I think, you know, immediately kind of like puts that gateway like many many months behind the companies that are
15:48fully focused on it. Like I am 100% focused on building the best router and gateway and and LLM marketplace and it shows in our product and um and you know, the the benchmarks that we create internally and how we see ourselves compared to the competition. Um this is not a side quest for us like it it may be for some other companies. Um the other problem is that it
16:15uh it reduces the leverage of all of your users. So, um like I really deeply believe in giving users and developers more leverage. Like fundamentally giving them access to more models is about giving them more leverage over all the innovations that happen in AI. You want to be able to like access them all. You want to reduce your dependency on any individual one. If um you know, you build on top of a a router
16:44or a gateway that you know, doesn't give you access to the full market or full flexibility or full customizability, um it doesn't give you like the the full leverage of the whole ecosystem, then you're you're kind of like being cut out. You're cutting out all your employees at your company of things that they they need. And so, like Open Router is fundamentally about giving people more choice cuz that gives them more
17:10leverage. >> You do that at a price at 5.5% take. >> That that sort of our our pay-go plan. Um we then added an enterprise plan with like a totally different pricing model. And um it's been very successful so far. You It's kind of based on like committed spend. And then uh you know, no fees on that committed spend. >> Cuz that was going to be my question.
17:36Ultimately, companies will like love it small. And then as you scale, you're like, "Shit, this is really freaking expensive. I'll just build my own routing tech now because it's become such a significant part of my cost base, actually." >> I mean, I kind of figured like some of those companies don't you know, just haven't realized we have like an enterprise plan. And some of them uh And some uh some of it is like our fault
- ·Many companies building routers because it's fashionable
- ·Copying mindset puts them months behind
- ·Focused players like OpenRouter: 100% product focus
- ·Reduces leverage of all your users
- ·Cuts off access to full model ecosystem
- ·Employees lose tools they need