We're not very far from being able to run pretty powerful AIs on edge devices. For one today's newest android phones all support vulkan and are equipped with GPUs that can run pretty sophisticated models. Also our better understanding of those models will lead to optimisations in their size.
So, let's not throw the baby out with the bath water. Let's not paint AI assistants watching over out sleep as something bad. It is not. It is bad only when we have no control over what it does with the data it collects.