A) Huge straw man, since it isn't the same people making those points. None of those need the other to be true to cause issues, they are independent concerns.

B) You're missing a few things like:

1. The hardware overhang of edge compute (especially phones) may make the centralized compute investments irrelevant as more efficient LLMs (or whatever replaces them) are released.

2. Hardware depreciates quickly. Are these massive data centers really going to earn their money back before a more efficient architecture makes them obsolete? Look at all the NPUs on phones which are useless with most current LLMs due to insufficient RAM. Maybe analogue compute takes off, or giant FPGAs, which can do on a single board what is done with a rack at the moment. We are nowhere near a stable model architecture, or stable optimal compute architecture. Follow the trajectory of bitcoin and etherium mining here to see what we can expect.

3. How does one company earn back their R&D when the moment it is released, competition puts out comparable models within 6 months, possibly by using the very service that was provided to generate training data.