The AI compute race is reshaping profit dynamics. OpenAI's "compute margin"—essentially the revenue slice remaining after deducting model-running costs—climbed to roughly 70% last October. That's a sharp jump from 52% at year-end 2024.

What's happening under the hood? Better efficiency. As AI models scale and inference techniques improve, the cost per inference drops. Simultaneously, pricing power holds firm thanks to heavy demand. This margin expansion signals that the AI infrastructure play isn't just about raw compute anymore—it's increasingly about optimization.

For the broader ecosystem, especially projects competing in AI-powered applications and on-chain AI solutions, this trend matters. When incumbents tighten margins through efficiency gains rather than price cuts, it raises the bar for everyone else pursuing compute-intensive workloads.