They are more likely trying to race towards wildly overinflated government contracts because they aren't going to profit how they're currently operating without some of that funny money.

Isn’t that a bit like saying: storage is commodity and thus profit margins will be/should be low.

All major cloud providers have high profit margins in the range of 30-40%.

The bottleneck for commoditization is hardware. The manufacture of the hardware required is led by tmsc and samsung being a close second. The tooling required for manufacture is centralized with ASML and several other smaller players like Zeiss and the design of the product centers around nvidia though there are players like AMD who are attempting to catch up.

It is a complex supply chain but each section of the chain is held by only a few companies. Hopefully this is enough competition to accelerate the development of computational technologies that can run and train these LLMs at home. I give it a decade or more.

Yeah, but we can self-host them. At this point in the span of it, it's more about infrastructure and compute power to meet demand and Google won because it has many business models, massive cashflow, TPUs, and the infrastructure to build expanding on their current, which would take new companies ~25 years to map out compute, data centers and have a viable, tangible infrastructure all while trying to figure out profits.

I'm not sure about how the regulation of things would work, but prompt injections and whatever other attacks we haven't seen yet where agents can be hijacked and made to do things sounds pretty scary.

It's a race towards AGI at this point. Not sure if that can be achieved as language != consciousness IMO

The "few approved providers" model is what they have been fighting against since the Biden admin

What profit margins?

The only way to win is commoditize your complement (IMO).