WordPress exists as as OSS even though WordPress.com exists. And there's a clear migration path from being hosted by WordPress.com to running your own private WordPress.org instance (or vice-versa), that can be taken at any time if someone's needs change. I don't see what's so different here.

If it were me, I would want to a) support the existing players in the ecosystem and b) do the migration piecemeal if possible.

Working with a third party lets them start standing up rooms immediately, and get their people using the new standard without being blocked on a long process of setting up their own infra. It’s federated. They can easily migrate onto their own hardware at a later date.

It also injects money into the community they are trying to support. Even if they did start running all of their own instances, I would hope they keep a support contract with Modular for that reason.

Paying Modular + using Matrix widely immediately + beginning work on their own infrastructure is a strictly bigger shot in the arm for Matrix than just putting a couple devs on pre-planning and prototyping infra would be.

Probably at the same point email federation only exists inside a bottle, in terms of server topography.

Which is why it's worth actively resisting centralization.