>if the frontier models are so good, why even sell them as your primary money maker?
First, none of these companies are really claiming that their models are so good that this would be a reasonable expectation. They do claim their models can support work across a lot of different industries and roles in order to make that work more efficient, but that's not the same as being a completely autonomous, end-to-end solution.
These companies do basically claim that, at some point, the "end-to-end" version of their models will exist. But until then, they need to survive long enough to be able to actually build such models.
>Couldn't OpenAI or Anthropic make a lot more money by just starting companies themselves that leverage the models and building their own products?
OpenAI and Anthropic are really good at operating AI services. They're likely not good at manufacturing shoes and serving burgers. Again, maybe one day their models will be so good that this won't be a factor, but for now, they need to really focus on what they're good at, otherwise they may be beaten by their competition and they won't exist long enough to create such models.
See: Competitive Advantage
On the same note, it's important to understand that everyone, including AI companies, deal with various capacity constraints. They don't have infinite compute, let alone infinite human attention to keep track of the necessary human-side of any of these businesses. So they're actually dealing with very finite and valuable resources. So would they rather expend those resources trying to build businesses with much more competition and much worse margins? Or focus all of their resources on being the best AI company which they believe will yield the best return on their investment? Again, maybe one day they'll have an AI, blah blah blah
See: Marginal Advantage
>Is selling tokens really the best strategy?
This is a, frankly, obtuse over simplification of what they're doing. Yes, they're selling tokens, but that's like saying all Nvidia does is sell computer parts. Sure, it's (somewhat) accurate, but it completely neglects the very valuable assets that these companies have: their IP.
OpenAI and Anthropic are valuable not because they run inference services; they're valuable because they're actively building SOTA AI services that are becoming increasing advanced. Those models are expected to be incorporated in a lot of different businesses, governments, and even individual's lives. So yes, they're just selling tokens on a technical level, but they're building very tight integrations which they expect will be so valuable to their consumers that they'll continue selling a lot of tokens at high premiums to the extent that they will effectively get a cut of profits across almost all industries and contexts, globally.
>Especially with commodification and prices declining wouldn't that indicate there is more money to be made on the application-side of the models rather than the utility side
Don't forget that you're not looking at their expected steady-state for these companies. If you're willing to believe them at face-value, Sam Altman and Dario Amodei believe that they'll eventually create an AI more capable than the collection of all humans on Earth. That'd be a very valuable asset to own as a business. At that point, they may not even be in the business of selling tokens; they may become some version of a consulting company that everyone, from businesses to governments, effectively must use otherwise they'll be at a disadvantage compared to those who do use it. Pushed to the extreme, they may literally ascend past the point of just being a business and could usher in a new economic system in which they're the center of all activity.
Or maybe they just end up selling tokens indefinitely. Who knows. Regardless, if you're looking at these companies as they are now and trying to extrapolate "linearly," then you are failing to understand the intentions of such high-growth tech companies. It'd be like looking at Amazon back when they first started and not understanding that Jeff Bezos' had a lot more planned than just selling books online.