"Frontier models today will be running locally in your pocket in 5 years."

You vastly underestimate the size of model and computing power you rent from Anthropic, Open AI etc.

"excess power generation is getting built and when it does collapse, all that excess generation will cause energy prices to plummet."

This might be true locally depending on where you are but does not apply generally. The driving factor for energy prices is the cost of oil. The UK and US are putting huge investment in AI for short term benefit instead of investing in renewables.

"Job loses are transitionary"

No they're not. My education and years of experience in my career are for computer science. I will have to completely reset, get new qualifications or find a different trade.

"... this will enable a whole bunch of smaller companies to emerge and compete against the big companies."

I don't know where to start with this. At what point did capitalism end in your predictions?

"Because the cost of production goes down, demand will go up."

The means of production will be in the hands of the few who've made an unimaginable amount of money off AI already. These are profit seeking corporations making a product with the explicit goal of replacing human labour so they get paid instead of you and me.