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It won't be coming for local inference.

they'll just outlaw that entirely

In some countries I don't see that as unlikely. Think about it, it's such a convenient way to criminalize anyone for an arbitrary reason.

Wont be able to for long as smaller models keep improving performance with distillation.

Once apple and co successfully embed local LLMs into their devices and custom processors it’ll be quite hard politically to reverse course.

If in any case they require logging for all LLM calls, then by extension local non logged LLMs would be outlawed sooner or later.

It would probably surprise no one if we find out, some time from now, tacit agreements to do so were already made (are being made) behind closed doors. "We'll give you what you want, just please don't call us out publicly."

Are they all not collecting logs?

“use a Google product to avoid privacy concerns” is risible.

Google has the calibre of lawyers to make this hard for news companies to pull off.