> an API that is likely a loss-leader to grab market share (hosted LLM cloud models)

Everyone just repeats this but I never buy it.

There is literally a service that allows you to switch models and service providers seamlessly (openrouter). There is just no lock-in. It doesn't make any financial sense to "grab market share".

If you sell something with UI, like ChatGPT (the web interface) or Cursor, sure. But selling API at a loss is peak stupidity and even VCs can see that.