Jenny Xiao & Liang Wu & Jay Zhao - Leonis Capital - MCPs: Value Creation, Capture, and Destruction—Lessons from the API Era - June 2025

An essay by Jenny Xiao, Liang Wu, and Jay Zhao of Leonis Capital that analyzes the Model Context Protocol (MCP) through the lens of the API era. It argues that while MCP standardizes AI-to-service communication, most startups built on MCP will fail because value will flow to infrastructure providers and vertical specialists, not to the middle layer of integration platforms. The piece includes a technical primer on MCP, a historical parallel with the API wave, and a framework for identifying where value will be created and captured.