I don't think they are toast, I mean they will be in some trouble because all of them have fallen victim to fomo and started building out with so much debt for capacity that may or may not be needed nor achieve the returns that they want. I think there's a future where "personal software" meaning highly custom apps generated by an agent is a thing that doesn't mean everything will become that, same for local LLMs but all of this is still too far. The main issue is that hyperscalers or big tech in general have become too powerful they can just buy their way in and out of legislation as they please, sorry I mean lobby ... funny how if you rename something it becomes legal or illegal

Exactly. Seems naive at best for an investment consultant to look narrowly at current model capability and not consider the broader market. For example:

1. The hyperscalers are in a positive reinforcement loop. Despite any suggestions to the contrary they keep getting bigger. And can, er, “influence” government policy/officials and anything else needed to keep it that way.

2. The frontier labs and their investors. Another self-fulfilling reinforcement loop. Witness the circular gymnastics among OAI/Anthropic, Microsoft/Amazon and Nvidia

3. Data. No-one believes that Zuckerberg and co are going to say “great, we can just run the models on devices we don’t own and stop the surveillance economy because, y’know, privacy matters and we really care about mental health”.

And then there’s data centre locations and “yeah but jobs” even though your power bills are going up, and “why run your own data centre Mrs CTO, let us do it for you and save all that capex and those pesky employees you need to do it”.

Don’t get me wrong: I’m rooting for local, open weight/source models. But “hey look they benchmark well” is an unhelpfully narrow basis to forecast the demise of central hyperscaler hosting.