But they're still not making money (apart from two quarters when they got massive discounts from xAI).

And yet, they are highly unprofitable. Yes, people pay for the API because it's a frontier model, but it's a frontier model because of billions of capex that are (so far) not getting recouped. And if they stopped the capex on new frontier models, that API revenue would walk off to whoever else does. If, at some point, the entire industry decides to stop burning money and start squeezing customers, that will be the test of which business models actually survive, and in that scenario I am bullish on scrappier shops that can't possible compete on all fronts now.