Haven't the SLMs been distilled using the LLMs?

If this is correct I see a future where the hyperscalers are funded by the businesses integrating siloed SLMs in their software.

Also the defence/intelligence industry will always want to keep an edge so don't be surprised if they stick around and we see favourable regulations for them similarly to how the government turns a blind eye to social media platforms because they increase the footprint of mass surveillance.

I wouldn't be surprised if the hyperscalers became software auditors and any piece of critical software was required to have a regulated security audit before it could enter production. Selling the poison and the cure is a great business model.