It's irrelevant the reason why, the margin any business can take will be constrained by the cost to switch to a cheaper, good enough, competitor.
You are saying it's difficult to switch due to compliance and admin issues. Ok!
LLMs can be swapped easily and open weight models can be hosted to adhere to whatever legal, uptime requirements etc are needed trivially.
The big cloud providers already host and resell open weight models.
The two don't event compare
It's irrelevant the reason why, the margin any business can take will be constrained by the cost to switch to a cheaper, good enough, competitor.
You are saying it's difficult to switch due to compliance and admin issues. Ok!
LLMs can be swapped easily and open weight models can be hosted to adhere to whatever legal, uptime requirements etc are needed trivially.
The big cloud providers already host and resell open weight models.
The two don't event compare