alt Hacker Newsmainframe industry vs personal computers.
If their product is "access to a big model running on a really big computer" (if we can count 'multiple data-centers' as a single enormous distributed computer), then the product "small, accessible device that everyone has" risks killing their cash cow.
Ironically enough, the first company to really focus on "an LLM in every phone" will have a good shot at actually being the ones that "changed everythingTM", in the way Microsoft changed the world from IBM mainframes to PCs, or Apple made smartphones a thing.
As an aside, the mainframe industry was profitable for decades before PCs took over. It’s not like they spent a zillion dollars ramping up at the same time.