I mean if you are wasting funds kind of knowing it's nowhere near remote competitive, then it's kind of a fraud.
They do really good R&D on a lot of stuff. This is just their attempt at public credibility/internal skill building to enter the LLM business.
Doubt its going to be successful, but they "waste" a lot more money on other things that you never heard of. Its not fraud, its just R&D dressed up a little too much too early.
Other than actual research, which is in a different camp.
Besides that, there is a ton of use cases for smaller models for a bunch of different things. We'll be unlikely to be able to run LLMs (actually Large) on smartphones for a while, while the smaller LLMs seem to run already on-device in experiments.