Can AI Labs be profitable without achieving AGI or even improving the models further? Yes. Current agents are useful, and clearly the agents haven't seen the ceiling as far as improvements can go.
LLMs hitting the wall is a separate issue. Agents are the layer that lets the model try out more. It is the layer that allows agents to open up python to do math instead of doing math themselves. It is the layer that has been getting the main developments for some time now. LLMs themselves have not improved their capabilities as fast as the transition between GPT3 to GPT4. You can see the improvement especially in long form writing, but the it is nowhere near the earlier improvements. Astra for example has a lot more attention to detail, so does Fable. Everyone keeps raving about Opus 5.5 being better than Fable, yet in long-term writing (barring prose issues) Fable is the clear winner. Agent wise Opus 5.5 is better; perhaps it is RL'd better, who knows?
Smaller models can use distillation to trick some metrics, but they can never actually be as good as larger models. Research is pretty clear about this. Even writing-optimized models that claim to be at Opus/GPT5.5 levels are abysmal in practice.
Scare tactics are the old salesman pitch, that have worked once already and catapulted Open AI to the moon essentially. I do not see any evidence that models are going rogue, or that agents are going rogue. I see incompetence. I cannot assume actual incompetence of this level, especially when the same people that said GPT2 was too dangerous to release are the ones saying their newer models are too dangerous to release. We have precedent here, and I have eyes.
Therefore the simplest reason is the money. IPO for both OpenAI and Anthropic are going to happen; everyone knows. To strengthen their position through whatever means necessary is a par for the course for tech companies.