My first impression is that this should enable approximately what Apple is doing with their AI strategy (local on-device first, then filling back to a first party API, and finally something like ChatGPT), but for web users. Having it native in the browser could be really positive for a lot of use cases depending on whether the local version can do things like RAG using locally stored data, and generate structured information like JSON.
I don't think this is a terrible idea. LLM-powered apps are here to stay, so browsers making them better is a good thing. Using a local model so queries aren't flying around to random third parties is better for privacy and security. If Google can make this work well it could be really interesting.
replies(5):