"The market for local models is always gonna be a small niche, primarily for the paranoid."

Have you ever heard of industrial espionage? Pr privacy regulations? Or military applications?

(Also the US military runs claude as a local model)

The goal of web hosting is to provide low latency wide availability to many users.

AI in this context has a very different goal as a tool for individual users.

You wouldn't say that hosting instances of Photoshop on servers and charging for usage is a long term viable business would you? Even if current consumer computers struggled to run Photoshop.

>"But people still use AWS"

I do not, I self host. My current client is also got rid from AWS packing up nice savings as a result