This is why they enforce the use of client apps like Claude Code/Codex (although OpenAI is a little more lenient). Trying to create a network effect.

Yeah it makes sense, but ultimately the only thing that creates any form of lock in is the chat history and memories, and that isn’t super important, it’s not a real network effect like a social media app or a taxi app.

Having a better model is the only real moat, without that inference is a commodity

There isn't lock in and this is what scares them. Switching cost is SO LOW. Our team runs the 3 main models to cross check work without any issues.

The benefits are real and our willingness to pay is real, but the valuations only support one and right now even the free cheap models might win. Thusly the collapse could still happen.

I think it will happen, like you say switching is easy and the only possible moat is to build a better model than your competitors at enormous expense.

They’re all stuck in a cycle of spending huge amounts of money on training just to stand still (in business terms).

In the long run, it can’t continue because it doesn’t make any sense