Why does Deus Ex Machina (the floating head thing) agree to Neos deal?
While the machines probably realize what a threat Smith is, and that they’re not currently capable of stopping him, Deus Ex Machina reacts with arrogance initially, borne of hundreds of years of machines being dominant. But let’s face it: they’re computers. They can calculate the odds in a fraction of a second, and they know the odds aren’t good. On the one hand, if the Matrix crashes, they lose all those minds, and the Sentinels destroy Zion, leaving no humans/batteries left. On the other, if Neo beats Smith, the Matrix persists, and they lose some minds as the rejections are freed into Zion.