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Corporate America is getting hooked on open-source AI

nytimes.com

71–80 of 300 posts

Re: Corporate America is getting hooked on open-source AI

#71
post #54

Earlier quoted context omitted.

But most commodities are the same way. It’s super expensive to drill for oil. I need oil and I’m in no position to mine my own because of the massive capital investment. But it doesn’t stop it from being a pure commodity. I couldn’t care less which company drilled for the oil… it’s all the same to me. Models are increasingly no different. OpenAI and Anthropic are a gas station saying “buy our gas for 10x the price!”…

So the business challenge is to balance sizable investments and relatively small marginal costs. Not so different from other digital goods.

Fair assessment. The challenge for OpenAI and Anthropic is that they need sizeable margins to pay for the massive costs incurred. Market forces are driving things in the opposite direction and fast.

When your competition has a tiny cost base compared to yours and lacks the bonkers future capital commits you made then that’s a terrible position to be in… hence their conundrum.

Re: Corporate America is getting hooked on open-source AI

#73
post #54

Earlier quoted context omitted.

But most commodities are the same way. It’s super expensive to drill for oil. I need oil and I’m in no position to mine my own because of the massive capital investment. But it doesn’t stop it from being a pure commodity. I couldn’t care less which company drilled for the oil… it’s all the same to me. Models are increasingly no different. OpenAI and Anthropic are a gas station saying “buy our gas for 10x the price!”…

So the business challenge is to balance sizable investments and relatively small marginal costs. Not so different from other digital goods.

Except OpenAI and Anthropic has brought in a lot of money, that with this trajectory will make it some of the worst investments in ”software” ever (if it’s true enterprise clients are actively moving away, I know we are but for other reasons).

Re: Corporate America is getting hooked on open-source AI

#74

I swear, Qwen 3.8 27B @ Q8 is smarter than Sonnet 5 most of the time. Why wouldn’t corporate America self host at this point, especially with better options like Deepseek Flash and GLM 5.3 flash that’s a middle ground between Sonnet and Opus

> Why wouldn’t corporate America self host at this point

Because they've been trained to think "cloud-first" for a decade?

Re: Corporate America is getting hooked on open-source AI

#76

Earlier quoted context omitted.

I don’t know what your sources are, but I work on AI at a Fortune 100 and open models now make up >90% of our internal token spend. Used to be 100% closed before this summer.

That's interesting, may I ask where you host it? Do you have trusted hosting companies that respect data privacy or do you host them yourselves?

If you use OpenAI or Anthropic trust were never a requirement in the first place.

Re: Corporate America is getting hooked on open-source AI

#77
post #26

Every larger company I talk to these days has an active project on moving away from OpenAI and Anthropic to open models. And they’re actively shifting, as the article says, so the threat is far from theoretical. Unless they both dramatically slash prices then they’re in big trouble. Neither of them can afford to do that and both desperately need to convince the street that the opposite will happen if they want any ho…

I know what happens in many big companies and not a single one is moving away from Anthropic/OpenAI/SpaceXAI. > Unless they both dramatically slash prices then they’re in big trouble False, they have already done so many times. > Neither of them can afford to do that and both desperately need to convince the street that the opposite will happen if they want any hope at a successful IPO. False, margins are higher and…

> like the behaviour of Fable, not the behaviour of Opus - the fact that many people speak about this is evidence.

I'm wondering how much of that is the harness vs the model. Overall, the 'feel' of a model seems to be largely due to the harness than the model itself.

Re: Corporate America is getting hooked on open-source AI

#78
post #54

Earlier quoted context omitted.

There are most definitely is a moat - but it works both ways. The railguards in the models create moats keeping customers out. And the cost to build a modern agentic model is in the 10 figure range and growing. This is an expensive arms race that is going to create moats.

But most commodities are the same way. It’s super expensive to drill for oil. I need oil and I’m in no position to mine my own because of the massive capital investment. But it doesn’t stop it from being a pure commodity. I couldn’t care less which company drilled for the oil… it’s all the same to me. Models are increasingly no different. OpenAI and Anthropic are a gas station saying “buy our gas for 10x the price!”…

The key difference is that the models upgrade multiple times a year. It is an inherently different than a commodity market

Re: Corporate America is getting hooked on open-source AI

#79
post #78
post #54

Earlier quoted context omitted.

But most commodities are the same way. It’s super expensive to drill for oil. I need oil and I’m in no position to mine my own because of the massive capital investment. But it doesn’t stop it from being a pure commodity. I couldn’t care less which company drilled for the oil… it’s all the same to me. Models are increasingly no different. OpenAI and Anthropic are a gas station saying “buy our gas for 10x the price!”…

The key difference is that the models upgrade multiple times a year. It is an inherently different than a commodity market

Yes, but changing models, even across providers, takes about two seconds and one line of code.

It’s literally the least stickiest thing in the history of tech. Which is a big problem for these companies.

Re: Corporate America is getting hooked on open-source AI

#80
post #26

Every larger company I talk to these days has an active project on moving away from OpenAI and Anthropic to open models. And they’re actively shifting, as the article says, so the threat is far from theoretical. Unless they both dramatically slash prices then they’re in big trouble. Neither of them can afford to do that and both desperately need to convince the street that the opposite will happen if they want any ho…

If companies are really doing this, then we're saying they have no problems spending tens of millions to get somewhat decent TPS and then having their employees complain they are timesliced and getting lots of timeouts because their org has 500 employees?

This is all spitballing, but I'd wager it's a third the type of workloads, a third hedging against your business depending on a single external provider, and a third trust.

Not everybody is coding or doing work that lends itself to burning tokens for warmth. Reuters for example seems to be more interested in using it for research, editing and formatting citations and the like. There's only so much of that work that needs doing, it doesn't always need to be real-time, and they probably don't see it scaling exponentially. They also need to be very aware and in control of their model's biases, or they risk it compromising their work output.

It's widely expected that all of the major providers will need to - and surely want to - drastically raise prices to justify the ludicrous amount of capital they're burning. Multiple companies have already talked about how their AI costs have exploded, and from what I understand that scale of enterprise is paying API rates. I would be disappointed if big business wasn't having a think about what that liability could look like. It's one thing to be reliant on a relatively "stable" vendor like Microsoft for Windows and Office, another to get AWS sticker shock, and then this is promising to be an order of magnitude worse.

Then just plain trust. What if ChatGPT starts recommending your competitors products, or the USA bars export of Anthropic's latest model (again, but for real this time), or they stop serving a model your business now depends on, and so on... That's a lot of risk to leave outside of your control.

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