Naive question - do local models call into question the business model for AI company profitability?

From what I understand Gemma 4 is at least as capable as the best frontier model from only a few years ago. If that becomes a trend (new local-run models get released every year that are as good as the previous frontier models) does that mean a hell of a lot of companies (and almost all individual users) will just use the free local model? Sure, they won't be as good as the very latest frontier model, but won't they be good enough for a large percentage of use cases? submitted by /u/weluckyfew [link] [comments].