This makes sense as long as people continue to value using the best models (which may or may not continue for lots of reasons).

I’m not entirely sure that AI companies like Cursor necessarily miscalculated though. It’s noted that the actual strategies the blog advertises are things used by tools like Cursor (via auto mode). The important thing for them is that they are able to successfully push users towards their auto mode and use more usage data to improve their routing and frontier models don’t continue to be so much better AND so expensive that users continue to demand them. I wouldn’t hate that bet if I were Cursor personally.