1. The labs lack high switching costs right now. Switching models is far to easy. If GPT 6 is 5% better than Opus 5, we all switch in 30s.
2. Tools have higher switching costs. You learn how to use them, introduce them to your teammates, leverage their differentiated plugin systems. Then, if GPT 6 is 5% better, you don't switch because Opus 5 is good enough and you love Claude Code.
3. Now the lab is no longer a simple commodity provider and they can start to slow down investment in training and they don't have to give you the best model all the time. They can keep it, or give it only to massive companies, etc. (Vs. if you were using opencode, and you could switch to GPT in 30s, they would have to keep competing on true model strength vs. price so you don't switch to GPT).
4. You use CC instead even though it's a little worse b/c the tokens are so much cheaper--$200/mo vs. $1500 a month. Such a great deal! There's the loss leadering.
5. This transforms the game from a product race into a fundraising race. The labs will win this, they have way more capital than anyone else.
6. Once the labs consolidate all the users, all the other product companies are forced sell themselves b/c the negative cash flow means they can no longer raise capital (probably to labs/big clouds), you raise the prices anyway.
Now you have no competition to provide the best model for the best price to everyone. And you also have less pressure to improve your product.
This is a very old game plan in silicon valley. Give it away for cheap or free and turn it into a capital race. Consumers always go for it--it's hard to resist an unsustainable deal. Then later on say "how did we end up here??" later when the prices are higher and products are worse.