This is assuming that you'll be priced the fraction of computing that you consumed. But you are actually paying for their infrastructure, for the R&D (and also the computation that went into training the model) etc. It is not clear that, for your own small computations, this kind of costs are needed, but you will still pay your share in the investment the provider made so that they could serve everyone's computation needs.

But, currently ... you're not. AI companies are operating at a loss, and are being subsidized by their investors.

Local may or may not be cheaper than remote now, depending on the details, but the factors you describe won't affect the math nearly as much as they will once that subsidization ends.

In that analogy bigtech AI is currently investing in cleaner air for all of us? We _could_ breath it through their hose, but might as well breath it outside.