I think a lot of people believe exactly that. To take one example from the "We Have No Moat" essay:
"It doesn’t take long before the cumulative effect of all of these fine-tunings overcomes starting off at a size disadvantage. Indeed, in terms of engineer-hours, the pace of improvement from these models vastly outstrips what we can do with our largest variants, and the best are already largely indistinguishable from ChatGPT." - https://www.semianalysis.com/p/google-we-have-no-moat-and-ne...
My comment is about generality, which is the remaining advantage of giant models.
The comments I see here are not about that. They are about small models succeeding at specific tasks, which is affirmed by this paper. Most applications of LLMs are not general purpose chat bots, so this is not bad news for most of the distill/fine tune community.
> We were initially surprised by how much imitation models improve over their base models: they are far better at following instructions, and their outputs appear similar to ChatGPT’s. This was further supported by both human and GPT-4 evaluations, where the outputs of our best imitation model were rated as competitive with ChatGPT (e.g., Figure 1, left).
("Competitive" meaning that 70% outputs seemed about as good.)