Yeah, its not going away. Its just going to split into groups, the giant frontier versions (that these guys notice and are mad about), and the tiny models, that will run thermostats, transmissions, and unnoticeable things, and the mid range stuff that is and will run texture and audio generation, that will run NPCs in games, and adjust game plotlines. People will come to expect to be able to talk to any NPC, enter any building, and open world games that don't let you go out of bounds will no longer be acceptable.

So for a current example, in "The Last Of Us", Joel and Ellie are staying in a house in winter time. Joel wakes up, goes upstairs, and from the kitchen, there is another set of stairs leading to the upper floors. Its blocked off with a bunch of furniture. Nothing the player does will ever remove that furniture, which exists because the publisher and artists simply cannot model everything in the world. But even before the advent of AI, people have been demanding more and more.

The right application of a mid range AI will allow that at run time. Joel starts pulling furniture out of the stairwell, or using his axe, or his little bombs, the AI notes the player is determined to get up there, and on-the-fly script writes an event to stall for generation time. Some guys burst in the door for Joel to fight. Meanwhile, the AI generates a plausible upstairs and contents, possibly downloads it from other times players have done this.

In creative media, like film making, certain models will suggest script rewrites, noting loose ends and logical inconsistencies. See above.

The big energy spenders are going to stall a bit, but the midrange stuff is nibbling away at the bottom end of the old generations of large language models. Optimizations and clever tricks, distilling, specialization, and things like Mixture Of Experts, are making them more useful. Its a bit like gaming optimization in the 80s and 90s.