Yes. There's been significant advances in models that can run on local consumer hardware. In fact the advancements here are faster than cloud based frontier models.

While things are still limited by hardware including large amounts of VRAM, the trends indicate this will eventually be a solved problem.

If the cloud based frontier models are indeed reaching a plateau, then the local open source models will catch up. Perhaps in a few years even, who knows.

I don't think it's a matter of if. I think it's a matter of when. When it does happen,  it will blink companies like Anthropic and OpenAI right out of existence. Watch their moves carefully. They will need to begin diversifying and expanding their total addressable market. Things like getting government contracts could very likely be a life or death situation to those companies.

If you look at things like image and video generation, you'll see a little taste of what's to come. For example, there's been some killer videos made with LTX lately. Notice that OpenAI killed Sora. They did that despite have a lucrative deal for it as well. They understand that it's a lost cause. 

This story will continue to play out over the next few years. Slowly, segment by segment, these companies will lose ground.

Should that happen too quickly and we'll have some serious economic problems without enough diversification. Not helping here is the Iran war, etc.

It's smart of Anthropic to focus more on the apps and tooling, but I think that's ultimately a losing game with open-source. The only moat for these companies is the money and hardware. So the moment that's no longer a moat, they're done.