Why not? While a local AI will be reliant on network resources, there’s no reason to believe that we can’t cram a general purpose AI into a portable device. The advantages would be considerable: do you really want your intellegence hampered every time you leave cellular range?
May soon congest Wi-Fi networks? 2.4 GHz has been congested for most of the last decade, and 5 GHz is being rapidly consumed by wider and wider channels.
The solution is higher density employments with lower power radios to create spatial diversity.
This argument is a total smoke-screen. There are calls in CoreWLAN which allow you to change the list of preferred networks, but they already have their own entitlements and can be separately restricted from the sandbox.