I expect it to, eventually. But then the cutting edge will have simply moved to something else.

I agree that it's very destabilizing. It's sort of like inflation for expertise. You spend all this time and effort saving up expertise, and then those savings rapidly lose value. At the same time, your ability to acquire new expertise has accelerated (because LLMs are often excellent private tutors), which is analogous to an inflation-adjusted wage increase.

There are a ton of variables. Will hallucinations ever become negligible? My money is on "no" as long as the architecture is basically just transformers. How will compiling training data evolve with time? My money is on "it will get more expensive". How will legislators react? I sure hope not by suppressing competition. As long as markets and VC are functioning properly, it should only become easier to become a founder, so outsized corporate profits will be harder to lock down.