> I dont understand how they will all be profitable when you can run a model on your own computer for free that will do 98% of what you need.

For the same reason how movie companies are reaping record profits from streaming services - convenience and fearmongering.

"You wouldn't download an AI, would you?!" or "Think of children and elderly!" or satanism, or billions of other tricks they already employ to keep you docile.

Also, majority of people do not have hardware to run models that compete with LLM vendors, at this point I'm pretty sure majority of people don't even own a PC anymore.