The future of local AI

For those of us who have been around for a while, we witnessed the huge demand for desktops, servers, and specialized appliances in the early 2000s. Everything was hosted in house. Of course, the bottleneck was the Internet.

Then the cloud came along, and everything moved from in house to someone else's servers.

What do you think will be the trajectory of AI?

Cloud first, and then a few people wearing tin hats building AI rigs in the basements?

Or will there be a good chunk of the market that will opt to host their own AI? If so, for what reasons?