Is this how the whole LLM thing will go down once providers raise prices?

Maybe - ask me in 20 years...

Nobody knows how the future will be. There are lots of options. There are self hostable open models today - they are not as good, but some report they are good enough. Right now I don't have the hardware to try them (I could - if I'm willing to accept a small number of tokens per minute - useful means more tokens per second as I can get in an hour). However I expect in a few years I'll be able buy consumer hardware with good enough GPUs (or perhaps an AI chip???). Will anyone other than a few hobbyists buy them? time will tell.

I think prices will go down not up eventually and everybody will have access to it in abundance. That might make most current AI companies go down of course.