That tech will regress due to the greed of tech corporations.
Tech is regulated by the big corporations that consistently either throttle innovation or degrade what already is established because they all want to figure out how to squeeze as much profit out of everything possible while blocking or preventing anything new that might compete with them.
Any new innovation that will occur will be military and will either have a machine gun attached to it or can deliver a high explosive.
One potential regression that I see is that the current generative models are abandoned, after being ruled as "infringing copyrights" by multiple countries. The tech itself won't disappear but it'll be considerably harder to train newer ones.
The most problematic part is however if one of them survives; likely Google. That would lead to a situation as in your second paragraph.
Law makers will start treating the open source community like pirates because they make LLMs freely available for anyone to run at home. And sure you can debate whether it’s theft or not but you know that’s not why regulations go after them. Meanwhile the mass theft of corporations will be deemed „ethical“ use because they „own“ the data they use. Lobbyism will likely make sure of that I‘m afraid.