If you are using LLMs for tool use locally, then in a decade it will not make sense anymore to pay for hosted solutions. Your device will have compute power to run powerful LLMs trivially.

If you need LLMs at scale to serve many customers, then hosted solutions make sense for the availability aspect. But by this point models can be offered by any generic services provider, like AWS or Cloudflare. Pure AI companies that just offer hosted models and nothing else will go extinct if they don’t expand to offer more services.