The bulk of it will be in the cloud. Aside from letting me make improvements that then get reflected in all apps LE is embedded in without updates to them, it also lets developers add new vocabulary and conversation patterns that they missed before, so that they can actually make their app's AI better without users having to update.
There are also interesting possibilities of cross-pollinating apps, so that as more developers use LE, its out-of-the-box capabilities grow. There's no reason, for instance, that developers should be re-inventing the wheel each time someone builds an app or a robot or whatever. Imagine if every human was born with the cumulative knowledge and skills of all previous humans. Now imagine you can do that with AI.