You can host a website on any rackmount server for pennies compared to AWS. But people still use AWS.
The market for local models is always gonna be a small niche, primarily for the paranoid.
>"But people still use AWS"
I do not, I self host. My current client is also got rid from AWS packing up nice savings as a result
"The market for local models is always gonna be a small niche, primarily for the paranoid."
Have you ever heard of industrial espionage? Pr privacy regulations? Or military applications?
(Also the US military runs claude as a local model)