I agree they are compute limited and disagree that they are aggressively optimizing. Many small teams are consistently showing many optimization gain opportunities all the way from app to software to hardware, and deepseek was basically just one especially notable example of many. In my experience, there are levels of effort to get corresponding levels of performance, and with complexity slowdowns on everyone else, so companies are typically slow-but-steady here, esp when ZIRP rewards that (which is still effectively in place for OpenAI). Afaict OpenAI hasn't been pounding on doors for performance people, and generally not signalling they go hard here vs growth.
Re: Stickiness => distribution leadership => monetization, I think they were like 80/20 on UI vs API revenue, but as a leader, their API revenue is still huge and still growing, esp as enterprise advance from POCs. They screwed up the API market for coding and some others (voice, video?), so afaict are more like "one of several market share leaders" vs "leading" . So the question becomes: Why are they able to maintain high numbers here, eg, is momentum enough so they can stay tied in second, and if they keep lowering costs, stay there, and enough so it can stay relevant for more vertical flows like coding? Does bundling UI in enterprise mean they stay a preferred enterprise partner? Etc . Oddly, I think they are at higher risk of losing the UI market more so than the API market bc an organizational DNA change is likely needed for how it is turning into a wide GSuite / Office scenario vs simple chat (see: Perplexity, Cursor, ...). They have the position, but it seems more straightforward for them to keep it in API vs UI.
Re: Stickiness => distribution leadership => monetization, I think they were like 80/20 on UI vs API revenue, but as a leader, their API revenue is still huge and still growing, esp as enterprise advance from POCs. They screwed up the API market for coding and some others (voice, video?), so afaict are more like "one of several market share leaders" vs "leading" . So the question becomes: Why are they able to maintain high numbers here, eg, is momentum enough so they can stay tied in second, and if they keep lowering costs, stay there, and enough so it can stay relevant for more vertical flows like coding? Does bundling UI in enterprise mean they stay a preferred enterprise partner? Etc . Oddly, I think they are at higher risk of losing the UI market more so than the API market bc an organizational DNA change is likely needed for how it is turning into a wide GSuite / Office scenario vs simple chat (see: Perplexity, Cursor, ...). They have the position, but it seems more straightforward for them to keep it in API vs UI.