API

An API is an interface that lets software systems exchange functions or data, often used to integrate AI into products.

API is a connection window that allows programs to exchange functions and data. Just like ordering from a set menu at a restaurant without having to go into the kitchen directly, you can receive results by making a request in a set way without having to know the insides of another company's program.

Because it is efficient to borrow well-made functions instead of developing all the functions yourself, it has become the standard method of modern software. In the AI era, it has become a common business structure for companies to purchase APIs from AI companies such as OpenAI or Anthropic and add AI functions to their apps and services. Since API usage fees are usually charged based on usage, it is also the key to understanding the cost structure of AI services. For AI companies, selling APIs is one of their key revenue sources.

✅ Why it matters

• You can attach proven AI functions to yits own service without developing it yourself
• This is the basic concept of understanding the revenue structure and ecosystem of the AI industry
• Usage-based billing is good for starting small and scaling up.

⚠️ Limits and debates

• Relying on external APIs makes you vulnerable to price increases or policy changes
• Costs can add up quickly as call volume increases
• There are security and privacy burdens in sending sensitive data off-site