Playing with them locally? Yes, of course it's a niche hobby. The people doing stuff with them that's not either playing with them or developing not just an "AI" product, but a specific sort of AI product, are just using ChatGPT or some other prepackaged thing that either doesn't run locally, or does, but is sized to fit on ordinary hardware.

< 1% of all engagement with a category thing is niche/hobby, yes.