On‑device AI can be a liability

A strategy that prioritizes on‑device privacy‑first AI over cloud‑centric models can preserve user data but risks leaving firms behind in capability, content, and ecosystem effects when rivals centralize compute and content in the cloud. When incumbents (like Apple) double down on on‑device approaches, they may undercut interoperability, third‑party content creation, and speed of model improvement. — This reframes a widely touted privacy posture (on‑device AI) as a strategic tradeoff with economic and competitive consequences for firms and consumers.