This feels like a market which hasn't settled into long-term profitability and is being subsidized by investors.

And who is doing the research on this, training the models, and building new frontier models in your version of the world?

Note that the (edit: US) postal system is a for-profit system.

Given the trends of the capitalist US government, which constantly cedes more and more power to the private sector, especially google and apple, I assume we'll end up with a state-run model infrastructure as soon as we replace the government with Google, at which point Gemini simply becomes state infrastructure.