> The question will be: how much of the current compute capacity craze will local hosting give the kiss of death to and what that means for the market.

This will depend on how much inference happens for consumer (desktop, local) vs enterprise ("cloud"), vs consumer mobile (probably also cloud).

I would assume that the proportion of "consumer, local" is small relative to enterprise and mobile.

I think the proportion is small because someone has to pay for the cloud services. When phones, PCs and Desktops ship with NPUs whole new markets open up for all that stuff people want but not enough to pay for.