I'm not sure if this prediction will hold true.
We're not seeing the progress in those "frontier models" that we have previously seen. There's certainly still gas left in tank tank, but we're way into the diminishing returns by now.
Cloud inference still beats hardware investments by orders of magnitude of course, but that's only if your data doesn't really matter to you.
It’s a constant tension in computing that has been around since mainframes and clients… Neither is going to disappear. My general feeling is normal people care more about how thin and light something is than their privacy, so if data center powered LLMs will have a strong future.
We are certainly not in the diminishing returns phase for LLM progress. No sign of that yet.