If the AI service provider uses your data to help better train their AI, it will be blacklisted by most companies. If you keep them in silos, the centralisation will offer almost no benefit while still being a very high privacy risk. The only benefit they get is that it allows them to demo it and see it's potential, but no serious business will adopt it unless you also provide a self-hosted solution.
I think the only people who will truly benefit from using cloud services as a long term solution are personal users and companies too small to afford the initial cost of the hardware.
For every other AI service providers, good fucking luck getting companies to trust you. I expect we will see a lot AI services that offer a cheap and easy to use cloud AI subsidized by a very expensive self-hosted version.
Even for a large company like Autodesk or Adobe, you might trust them with your engineering drawings and your new product design, but would you feel comfortable uploading your code base for internal tools, employee files, email communications, etc. to them? It's gonna be a hard no for a lot of businesses
> Often have network effects where the size of the network causes natural monopoly feedback loops.
This one in particular sounds like an argument that remote models will win.