In other words the gamble of hiring expensive juniors with shiny degrees is greater to them than the gamble of not having competent seniors a few years down the line. And that risk may be overblown - people are still hiring some juniors, it's not like it has stopped entirely - so future seniors will likely just be worth more than they are currently. To some, that may be worth the risk, especially if you believe AI will continue to get stronger.
I am not saying I agree with this decision making, more pointing out the thought process. We have had to have similar discussions where I am but are still hiring juniors, FYI. That's basically all we're hiring right now, actually, because the market for strong juniors is very good right now.