> What is their next step to ensure local models never overtake them?

As someone who experiments with local models a lot, I don’t see this as a threat. Running LLMs on big server hardware will always be faster and higher quality than what we can fit on our laptops.

Even in the future when there are open weight models that I can run on my laptop that match today’s Opus, I would still be using a hosted variant for most work because it will be faster, higher quality, and not make my laptop or GPU turn into a furnace every time I run a query.

If your laptop overheats when you push your GPU, you can buy purpose-built "gaming" laptops that are at least nominally intended to sustain those workloads with much better cooling. Of course, running your inference on a homelab platform deployed for that purpose, without the thermal constraints of a laptop, is also possible.