If these applications become prevalent enough to affect purchasing decisions, then ATI will adjust their hardware when necessary.
But this assumes that adjusting their hardware preserves all of their current benefits in terms of cost. In other words, you assume that NVidia can't really make their implementation more space efficient, but ATI can add all of the benefits of NVidia's architecture for the class of application we're theorizing, yet not suffer from it.
When I was talking about a product, I wasn't talking about replacing exisiting farms from Microsoft, Google, etc. I was talking about a killer HPC product with mass market appeal. Imagine automated driving, for example. I thought this is the type of GPGPU market explosion that you were talking about. I don't really see any common desktop application needing that kind of power, because we don't even have much to use 100 GFlops on top CPUs today, let alone 3 TFlops of OpenCL power.
HPC for me means scientific applications in computing clusters. I've never heard the term HPC applied to embedded computing. Typically HPC clusters work on problems like n-body simulation, computational fluid dynamics, weather simulation, molecular biology, etc.
Sure, if NVidia could get every Toyota to use a Fermi for visual processing, that would be a large contract, but I was assuming that there is still a large market for media applications, be it games, or photo processing. It Nvidia could demonstrate sheer superiority in physics with a killer app, or say, vastly accelerated OpenCL based face recognition for photo libraries, it would be a good use case.
I mean, if you really want to be pessimistic, there is simply no need, currently, for people on the desktop to have 2 TFlops of computing power, be it Fermi or R8xx. Most of it goes underutilized, no one is truly taking advantage of all that power on the desktop, and frankly, outside of games, no one has demonstrated much of need for that kind of power. On consoles, it might be a different story, but today, Intel, Nvidia, and AMD are building products that consumers don't really need.