Cloud AI services will always be more capable. You can do more with near-limitless RAM and processing power than you’ll ever be able to do locally on your mobile/desktop system.

But locally-run AI’s usefulness was never in question either.

An example of this is Google who made the Coral TPU and then the Pixel TPU chips specifically in a bid to bring AI to edge and mobile devices. And now they have been developing a version of their Bard AI that is built to run on mobile systems.

There is a huge market for it but there are a lot of challenges to running AI models on lower power hardware that have to be addressed. In its current state most AI on these platforms performed only get specific operations using very condensed models.