

No, the actual AI runs locally, on the phone. What MLKit does is two things:
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Downloads the actual AI models from Google’s servers — not sure, but maybe they can be bundled or downloaded from other sources.
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Send the usage analytics about those models — again, don’t remember exactly what’s being sent but the actual prompts/source images/model responses shouldn’t be sent in normal operation.
Why I highlighted the normal operation thing is because Google is kinda famous for collecting data it shouldn’t be collecting, e.g. read this README for example: https://github.com/PlqnK/magisk-supl-replacer

GMaps is horrible not only as a service that forces you to enable all their spyware technologies or lose most of the functionality, not only it’s hostile to any other mapping applications and makes it literally impossible to even copy the coordinates (I’m not even talking about converting links or using geo-uri’s), but even within itself it’s absolutely horrible for any non-car activity: hiking, walking, cycling, running, commuting — the UX of all that is absolutely abysmal.
So if you find a solution that works for you without GMaps (and preferably the one that contributes back to something like OSM), good for you, stick to that solution a forget that absolute garbage produced by Google.