Are they? I don't believe there's that big of a market for local AI. Most people don't care that much, and you'll most likely lose the advertising revenue.
I agree that the market for local AI is basically limited to nerds at this point, but that's because nobody's really explained why local AI is a good thing and also because the vast majority of people need the $20 paid plan at most. How much time and money would it take to get something half as good as OpenAIs products running locally?
There are a lot of good things that need to be explained to people, but nobody ever managed to. I don't think this will be any different.
> because the vast majority of people need the $20 paid plan at most
Exactly, people are not gonna invest time and money when there's already something else that satisfies their need.
Local AI will need to be both better and more convenient in order to be adoped by the masses.
Moreover local AI is not free. You'll need proper hardware to run it which you have to pay extra for it.
However, if you can deliver 90% of the value of AI for 90% less cost, that is a really big incentive. Companies will spring up to fill that kind of gap.
Nobody can undercut the big AI players right now because they are all over-funded by VC money. Once the frontier companies try to match cost to expense, suddenly they become very, very vulnerable.