Is the era of "Cloud API Wrapper" SaaS ending?

I’ve been experimenting heavily with Local LLMs and on-device RAG lately. Don't get me wrong, cloud APIs are undeniably powerful, but local models have gotten surprisingly good. The reality is that 90% of people using LLMs are just asking them simple questions—massive, expensive cloud models are often complete overkill for everyday tasks.

Because of this, it feels like the hype around just wrapping the OpenAI API is dying down, especially for apps that handle sensitive data like NDAs or private client files. I recently managed to get a local RAG pipeline running smoothly on mobile using Vulkan GPU compute, and the privacy benefits are huge.

Do you think local inference will become the new standard for privacy-first apps, or will cloud APIs always dominate?