Tamagotchis? thats a name i didn't hear in a long time. hahaha. You know you can still buy them right? XD.
I don't think local AI will become something similar because even companies need them. For example, if you are a big company and want or need to use AI (any kind) for something. You can use a third party AI But that means sharing private info with the third party ai's owner. So if you want to have your own, local AI running in consumer grade hardware is more cheaper and easy to maintain, customizable and upgradeable than a complete datacenter.
Also, i think Local AI (like anything local) will still be alive as much as a market for that exist. This may be the only thing that gave us, the end user, a small and sometimes huge amount of power. The less people use cloud-ai's -> the less profitable is -> less companies trying to push it. (This applies with anything.) Also, alternatives exists since always: In a world dominated by Adobe you can find Affinity, Inkshape,Krita, Gimp, Paint.Net. In a world dominated by Cinema4D or 3DS there is Blender. In a world desktop is windows there is Linux and Mac. None better or worse but different.
But in a world where most of people is used to use Netflix or Spotify premium (easy of use over privacy), well, it makes me don't put my hopes too high.
And even that, we already have plenty of open source and local AIs (SD, Wan, LLama,Quen,Deekseek,Gemma,LTX,DiffRymth). I also tried one LLM that ran locally in my android phone. (It was slow and heated the phone a bit, but it was something. XD).
Sorry for all the text. I need to learn when to shut up.
XD