Patel explains OpenAI's router will send low-value queries to cheaper models but use expensive compute for high-value monetizable queries.
“if the user asks a low value query like, hey, why is the sky blue? Just route them to mini. The model can answer perfectly fine, and that is a chunk of queries.”
Patel argues OpenAI captures less than 10% of the economic value it creates, pointing to broken value capture across AI.
“I legitimately believe OpenAI is not even capturing 10% of the value they've created in the world already just by usage of chat. Right?”
Patel predicts OpenAI will monetize high-value queries like finding lawyers by taking a transaction cut from agent actions.
“But if they ask, what's the best DUI lawyer near me? All of a sudden, this is like, you're in jail, you have one shot, you're like, screw it.”
Patel reports 10% of Etsy traffic comes from ChatGPT but OpenAI currently makes nothing from it.
“Etsy. 10% of their traffic now comes from chat, and OpenAI makes nothing off of that. But they very they really, really will soon. Right?”
Patel says OpenAI's router enables monetization by routing low-value queries to cheaper models and high-value queries to expensive ones.
“And now this immediately clicks like, oh, if the user asks a low value query like, hey, why is the sky blue? Just route them to mini.”
Patel says Substack monetization reached hundreds of thousands in months, then millions before he left the platform.
“It got to a few $100,000 of revenue and I was like, Holy crap. And then I was able to start hiring. And then I left when we hit a few million of revenue.”
Patel ran SemiAnalysis full-time for 18 months before monetizing, reaching hundreds of thousands in revenue within months on Substack.
“So I was doing semi analysis for a year and a half full time before I actually launched monetization with Substack. And then that really took off within just a handful of months.”
Patel argues Substack enables sustainable media monetization through audience discovery and direct reader payment.
“And I think Substack has really done something interesting there where it enabled people to monetize their business in a way Or one, get the eyeballs, and two, monetize their business in a way that it's actually sustainable.”
Patel says Substack revenue alone reached multi-million dollars before expanding beyond the platform.
“Now, scaled to be And it has scaled to be multi million dollar Substack revenue. Obviously, built a lot of business beyond that, even that is good enough”