In theory, it would be possible to benefit from the ability of Stable Diffusion to increase perceived image quality without even using a new compression format.

In theory, it would be possible to benefit from the ability of Stable Diffusion to increase perceived image quality without even using a new compression format. We could just enhance existing JPG images in the browser. There already are client side algorithms that increase the quality of JPGs a lot. For some reason, they are not used in browsers yet. A Stable Diffusion based enhancement would probably be much nicer in most cases. There might be an interesting race to do client side image enhancements coming to the browsers over the next years.