You lay out some good arguments but I agree with both: the models relative to few years back really did become the commodity because today you could take the non-frontier model, maybe self-host it or pay the much less price per M tokens to get the performance of a ~2-year old frontier model. At the same time I do think that we are getting into the monopoly/duopoly/tripoly with the frontier models for all the reasons you already mentioned, and this scares me a little bit.

Lower intelligence LLMs can be a commodity, yes. But these won't make much money, if at all. At the end of the day, it costs the same to inference a 1T frontier model and a 1T free model.

OpenAI and Anthropic don't compete in the LLM commodity market. Hence, I had a problem with slide 22.