OpenAI will integrate o3 into GPT-5 instead of releasing it separately, streamlining adoption while signaling a shift toward fewer, more controlled AI models amid rising competition and cost pressures.In both ChatGPT and our API, we will release GPT-5 as a system that integrates a lot of our technology, including o3, CEO Sam Altman said in a post on X.The decision marks a departure from OpenAIs recent strategy of offering multiple model variants, suggesting the company is prioritizing ease of deployment and product clarity for enterprise users.We want AI to just work for you; we realize how complicated our model and product offerings have gotten, Altman said. We hate the model picker as much as you do and want to return to magic unified intelligence.With enterprises facing rising costs for AI adoption and competitors like DeepSeek introducing lower-cost alternatives, OpenAIs move could also be a response to market pressures.A single, more comprehensive model may help justify AI investments by reducing the complexity of integrating multiple systems while ensuring compatibility with OpenAIs broader ecosystem.OpenAI will also launch GPT-4.5, codenamed Orion, as its final model without chain-of-thought reasoning, Altman added, without providing a timeline.A change of approachThe rapid proliferation of AI models has intensified competition among research labs, each striving to develop smarter, more efficient systems with larger context windows and specialized functions.While this innovation has expanded capabilities, it has also introduced complexity, making it harder for users to choose the right model.The burgeoning list of models has added complexity for the average user who just wants chat to work without having to figure out which model to use, said Abhishek Sengupta, practice director at Everest Group. For developers, its a mixed bag on one hand it takes away the need to incessantly check which model is best suited for which task (at least for OpenAI) but on the other hand you are outsourcing your choice of optimal model to OpenAI.While model selection may still occur, OpenAI could handle the process rather than users. Analysts suggest this could also be an attempt to avoid the race between model performance and cost by bundling all AI capabilities under a single system.Maybe the consolidation of models into a single source of intelligence is a move toward creating an intelligence platform, Sengupta added. Maybe thats the differentiation they are placing their bets on. Time will tell.Rising competition and open-source threatsThis shift could also reshape the economics of AI, giving OpenAI greater control over costs, deployment, and market positioning.I believe merging it has multiple benefits, not just in terms of costs related to training, go-to-market strategies, and customer delivery, but also in giving OpenAI more leverage to drive it as a system and extract more value through a simplified business model, said Neil Shah, partner and co-founder at Counterpoint Research. This will change the economics on both ends, which investors will be keen to monitor and measure.This comes at a time when AI competition is intensifying, with DeepSeek disrupting the market with cost-effective models, highlighting the pressure on OpenAI to refine its strategy.One cannot rule out this move being triggered by competitive models like DeepSeek, which are highly cost-effective, said Sanchit Vir Gogia, chief analyst and CEO at Greyhound Research. Of course, there shall be many other models out there that will be more cost-effective and innovative, and most importantly, will be made open source and not proprietary like OpenAI.Importantly, not all organizations have the resources, need, or strategic planning to navigate complex, tiered pricing structures. Despite the rise of SaaS, many large enterprises prefer EULA contracts since they are incubated from any risk associated with sudden and unplanned need for resources, Gogia added. In the same breath, not all organizations require a customized model and the flexibility that comes along with it. Many of their use cases are simplistic enough to use a model that keeps the billing and the use simple.