>a DeepSeek distillation on my PC - where each step of the process is visible - removed quite a bit of the magic behind the curtain.

I always figured that by the time the 1990's came along, there would finally be powerful enough PC's so that an insightful enough individual would eventually be able to use one PC to produce such intelligent behavior that it made that PC orders of magnitude more useful. In a way that no one could deny there was some intelligence there, even if it was not the strongest intelligence. And the closer you looked and became familiar with the underhood processing, the more convinced you became.

And that would be what you then scale, the intelligence itself, even if weak to start with it should definitely be able to get smarter at handling the same limited data if the intelligence was what was scaled more so than the hardware & data.