AI Strategy That Builds an Unstoppable Competitive Moat

The 70-20-10 rule that turns AI from a cost center into a strategic advantage

Hey AI Productivity Explorer,

Warren Buffett is one of my favorite investors and businessmen. I admire his conservative investment style and his wisdom on living well.

One particular event that comes to my mind is from 1997. It was during the height of the dot-com boom when Warren Buffett was asked why he hadn’t piled into the frenzy of internet stocks. His answer was disarmingly simple:

“I don’t invest in businesses I don’t understand.”

By 2000, the NASDAQ had lost nearly 80% of its value. Companies that once commanded billion-dollar valuations disappeared overnight. Pets.com, Webvan, eToys, the list reads like a cautionary tale of chasing shiny objects without building fundamentals.

But Berkshire Hathaway emerged from the crash stronger, not because Buffett avoided technology forever, but because he insisted on one principle: build businesses with moats, not fads.

That moat mentality is what kept Berkshire thriving while competitors crumbled. And it’s the same philosophy you need to apply to AI today.

Most companies adopting AI in 2025 aren’t building moats at all. They’re repeating the dot-com mistake and subscribing to the same tools as everyone else, mistaking access for advantage, and accelerating their own irrelevance.

If Buffett had a fortress filter for investments, you need one for AI.

Table of Contents

1. Why most businesses are repeating old mistakes with AI

2. The Fortress Strategy: 70-20-10 Rule

   – How to allocate your AI efforts for lasting advantage

3. The Flywheel Effect

   – How the three layers compound into unstoppable momentum

4. Your Next Steps