Local models will never compete with large SOTA models, in the same way an iPhone doesn't compete with supercomputers doing nuclear simulations.
They paths will differentiate and split. Probably SOTA models will eventually be locked down and only accessible to state actors because of how expensive they will be to run (already started with Mythos).
You are missing the point. Parents says the market to win need economical models more than SOTA models. Whoever is running those nuclear simulations is not making as much as Apple.
its a big assumption that larger models bring any measurable benefit in the long term. there's a point where its not worth paying the expense of a bigger model and we dont know where that will be as both, models and hardware improves.
we do know however where evolution is at right now with our brains, but thats probably not comparable - yet the only thing I can see to make any kind of prediction at all