Their first bet was than they were going to be the frontier model provider by a good margin, and that others would not be able to compete on the "intelligence". And that they could get distribution via big customers looking to buy model access. The dominant-model-provider strategy has already failed, many actors have models that rival them - both established (Google) and newcomers (Anthropic). Open models are not to shabby either, enough to undermine the narrative "we are uniquely able to do powerful models". As you say, there is a commodification process started, and it might be a race to the bottom in terms of margin. So, OpenAI has moved into a new/adapted strategy, where they want to own the customers to a much larger degree, and rely less on partners/customers for distribution. This is likely because their prospective partners have a bunch of viable models to select between (many end products for power users lets people select freely), and high competitive pressure on costs (as it defines the margin and competitiveness) of the end products. Codex, Sora, their new web browser announcement, adjustments in ChatGPT is all to ensure a lot of direct end users - more brand recognition, more influence, more monetization possibilities. So I think it is a considerable pivot from their initial plan/hopes. But it is not an unraveling - it is a rather smart response to the fierce competition in the market.