I would bet on either side, but not in the middle on the model providers.
They are facing competition from companies making hardware geared toward that inference that I think will push their margins down over time.
On the other end of the competitive landscape, what moat do those companies have? What is to stop OpenAI from pulling a Facebook and Sherlocking the most profitable products built on their platform?
Something like Apple developing a chip than can do LLM inference on device would completely upend everything.
Models don't have this benefit. In Cursor, I can even switch between models. It would take a lot of convincing for me to switch off of Cursor, however.