1. The value in proprietary software largely lies in the source code, which is not available in on-premises, you are talking about compiled binaries. There is no such thing as "compiled binaries" for neural network weights.
2. License/copyright - Even in the best possible case, there are plenty of jurisdictions that don't care about US copyright and would love to get a hand on those weights.
3. We haven't seen copyright cases around model weights before. If I managed to exfiltrate OpenAIs model weights, I would continue training for a few iterations and then I think it would be quite difficult to prove that I actually have the same model as OpenAI. This is untested, why would they risk it.
4. Running these models requires a ton of resources, vastly beyond the typical onprem deployment - why would Azure invest in making this possible when it really could only impact a very small percentage of companies?
The weights are OAIs lifeblood, I imagine they are very protective of them.
How is running GPT on Prem any different than other proprietary software like Oracle DBs or even Windows server.
When it gets leaked, they can use licences/copyright to prevent anyone from using it to compete with them.