This is a constantly repeated conspiracy theory and is not true at all. The api costs do increase but aggregate costs per task decrease. The question is: do people need lower intelligence models at all? The answer is a resounding NO!

How many people do you see using haiku or sonnet? I see very few and most people default to the latest model and just play with thinking effort. I think three layers are good enough and supporting more is not a good UX.

Are you only considering coding use cases?

Many enterprise use cases, such as simple data extraction, are well served by cheaper models.

Do I need the most intelligent model to generate boilerplate code, which is my main usage for AI? Resounding No.

For my use case a model from a year ago is good enough

I... use them all the time: plan with a more advanced model, build with a cheaper one. Anthropic literally packages a metamodel (opusplan) for that pattern.

Also: calling the SV blitzscaling strategy of using VC money to fund loss leader products with the goal of building a monopoly via dumping a conspiracy is quite the position given there's entire books written in the topic...