Case in point, Microsoft just announced it is toying with the idea of using DeepSeek as a cheaper model tier in CoPilot. They are hosting the model themselves.

Exactly this. For some reason this is constantly being overlooked/confused. It is very possible to deploy these models inside your own VPC on the big cloud providers and have it be completely secure. I would argue that is even more secure than trusting a model provider’s native API as your traffic is not staying inside your own controlled cloud environment.

I was reading the threads about local AI closely yesterday. Some people seem happy with it.

If I had the cash, I'd spend 6-10k on a strix halo with 128 GB and run it local with no internet connection. I think the Framework desktop is sold out but there were others seem to be still available.