I found this video https://youtu.be/IQvREfKsVXM interesting, especially because it mentions couple of AI studies/papers that argue in favor of much smaller (and more efficient) models. (And I have never heard of them.)

I suspect that yes, for AGI much smaller models will eventually prove to be sufficient. I think in 20 years everyone will have an AI agent in their phone, busily exchanging helpful information with other AI agents of people who you trust.

I think the biggest problem with tech companies is they effectively enclosed and privatized the social graph. I think it should be public, i.e. one shouldn't have to go through a 3rd party to make an inquiry for how much someone trusts a given source of information, or where the given piece of information originated. (There is more to be written about that topic but it's only marginally related to AI.)