This is a good point.

However, if I put my sci-fi hat on for a second, it's not so far fetched that we figure out a way to compress models to a size where it wouldn't need all that compute.

Yeah, the compute is definitively another way to make them slow down, just cap the amount of TFLOPS available and things will slow down.

Obviously this will have huge impact on some companies valuations, but you can have one's cake and eat it too.

IIUC it's an open question whether they have the electricity to actually run all the "compute" they own on paper.

That aside, I'm not sure why it's particularly interesting they have all this "compute" (let's just assume for the sake of argument it's all "live"--that is they can actually run workloads on all of the "compute" they have on paper). So what if it's the biggest amount ever? Why would that be meaningful? Is there some economically viable problem you're aware of that is somehow dominant in that way?