IMO big models are not a product in and of themselves. Inference is just a new type of compute. I'm confident that in two or three years, every product will have inference capabilities integrated into the experience, and models will become less and less distinctive from one another.

What most products need from a model is a pretty short list: the ability to make tool calls well, accurate recall, and the ability to follow directions without wavering (whether or not those directions are baked into the weights or provided in a system prompt). That covers 95% of inference utility in products.

We're nearly there, and I believe these capabilities will fit on small models.

Because of this though, I predict hardware demand will stay high despite demand for "hosted" inference dropping. Unless there's some regulatory shenanigans that step in to say otherwise.