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Moreover, all the frontier labs and hyperscalers are capacity constrained, and will be for the foreseeable future.

Their story (valuation) hinges on it - therefore that’s their investment thesis when raising money.

>OpenAI seems to believe more and larger datacenters is the path to better models...

Does that mean they produce better slop, or more slop faster?

Better slop. The effect that these systems get better as you scale up [0] is real you know.

[0]: https://arxiv.org/pdf/2001.08361

Slop is still slop. There is no legitimate evidence that these systems get any better just by throwing more hardware at it. Every one of the people in this paper is involved with OpenAI, so it is very suspect in its findings.