Yes they will. They are already, if you run local models, that are only getting better. There are 7-11B models that are as good as ChatGPT 3.5
OpenAI isn't a eletricity company so the token prize is still zero for what is worth for VCs.
> but the technical advance will allways be for the smarter model
Not true. Currently, the small models are advancing much faster with daily new releases