I also wonder how "knowledge transfer" will happen when you get a new machine in the future? What about backups, do they sit in the cloud already? These all sounds like ways that this "local" AI PC will share data with the MS cloud in one form or another. With Apple doing similar things already on iPhones (I know there are differences, but its still analyzing your data etc), I wonder if Linux might actually become a more mainstream OS in the future.
Could also be that people stop using computers as much and just use tablets with docking stations + keyboard & monitors (again, there is work to be done, but its a possibility from a HW level). That would leave us with MacOS & Windows for business desktops (with some Chromebook & Linux sprinkled in there). Education would probably be more Tablet & Chromebook style compute, and gaming is already moving to the cloud (I guess the positive here is that we might finally be able to get rid of AntiCheat software:) ).