Are you sure you're not mixing up companies training their own frontier-ish models with companies providing hosted LLM API? For a close comparison, VPS hosting provider market did not collapse to a small number of players - few companies dominate the market (AWS, GCP), but there are thousands (or tens of thousands) of medium and small players available.
There are already 80 providers on Openrouter.
And that isn't sustainable. The market will collapse into a small number of players, in exactly the same way that literally every other market has.
Are you sure you're not mixing up companies training their own frontier-ish models with companies providing hosted LLM API? For a close comparison, VPS hosting provider market did not collapse to a small number of players - few companies dominate the market (AWS, GCP), but there are thousands (or tens of thousands) of medium and small players available.