Until they pass what closed models today can do.
By that time, closed models will be 4 years ahead.
Google would not be giving this away if they believed local open models could win.
Google is doing this to slow down Anthropic, OpenAI, and the Chinese, knowing that in the fullness of time they can be the leader. They'll stop being so generous once the dust settles.
Google, at least, is likely interested in such a scenario, given their broad smartphone market. And if their local Gemma/Gemini-nano LLMs perform better with Gemini in the cloud, that would naturally be a significant advantage.