Using models that are created as a psy-op by foreign countries will end badly.
Corporate America is getting hooked on open-source AI
231–240 of 304 posts
Re: Corporate America is getting hooked on open-source AI
#232This is not a viable strategy. You're effectively paying for hardware and/or cloud. Why do this when OpenAI and Anthropic are both significantly subsidizing costs to win the market?
Talk to “AI” executives at large firms and 95% of them are clueless sales types that crawled their way to the top. Then again, it is basically a repeat of IBM, Microsoft, Oracle, etc. Same dumb executives making decision to not get fired and enjoy their place at corp.
Re: Corporate America is getting hooked on open-source AI
#233Every 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…
> However the cold reality for both is that there is zero moat to a model anymore. The moat right now is a) the hardware, b) the electricity, c) the intelligence, and d) scalability. On hardware, it's very expensive to purchase anything which can provide a fraction of the performance of a subscription. Traditional accounting depreciation would imply that purchasing local hardware is a terrible financial decision. On…
Re this point
> As for intelligence, the frontier models from OpenAI and Anthropic are still superior, and they have at least a 3-6 month head start. Distilled models are closing the gap on some metrics, but they still can't compete. That's why they cost so much less.
I would argue that the reason they cost so little is because anyone can run open models and offer them as a service, so there's actual competition and the price is closer to cost. i.e. if the open models were just as intelligent as frontier models but cost the same to run as they do right now, the price wouldn't be higher (unless demand went up so high that marginal cost to provide more of the service went up, due to scarcity of hardware and or electricicy).
On the other hand, if what you're saying is the frontier labs have some pricing power due to their models being better, and that is the reason they are able to charge more than the companies providing open models as a service, then I would agree.
Re: Corporate America is getting hooked on open-source AI
#234Using models that are created as a psy-op by foreign countries will end badly.
Using cloud hosted models that are created as a psy-op by domestic billionaires and crypto-fascists will end badly.
At least with self-hosted models the people running them get full control and don’t need to worry about the model or guardrails changing under their feet.
Re: Corporate America is getting hooked on open-source AI
#235The thing is, for big companies (or even small ones owned by PE, which is MOST of them), it's not just about cost. The big thing is risk . In my experience as a tech diligence assessor for PE firms for the last 7 years, investors really, really don't like companies being beholded to single entities that they don't control. Anthropic and OpenAI have demonstrated that they are not trustworthy, or predicatable, or finan…
How does this compare to being beholden to a single cloud providers like AWS or Google Cloud? Has there been a sea change in how investors view these things in general, or is it only AI?
Well the big thing that stands out in the reliability front is that AWS and Google cloud are typically stable, certainly more than 3 nines. Meanwhile openai seems to roll dice on every request to see if they’re going to return a 500 or not.
Re: Corporate America is getting hooked on open-source AI
#236Earlier quoted context omitted.
If that was the case the major labs would have done that. They’re burning cash like there’s no tomorrow. They desperately need to show that they have a real business and not just a giant burning pile of cash doing academically interesting things. If they could simply sell models that are 95% as good at 1/10th the price they’d do that. They’re losing the enterprise sector because they’ve not done that.
I'm not sure why this style of cocksure Zitronesque comment is so trendy. It seems strange to make this statement, as if one has teleported to September 2026 from the end of the universe. Commenters in this vein aren't looking back to see that Anthropic and OpenAI models were the only truly usable ones for software development at the beginning of the year. Even Deepseek, which was and is revolutionary, was not useful…
Did you read the article? It’s not some future predicting theory. Open AI and Anthropic losing these workloads is what’s happening today.
Re: Corporate America is getting hooked on open-source AI
#237Earlier quoted context omitted.
I support and use open models as much as possible, but I'm not totally convinced that OAI or Anthropic have no moat, even as open models catch up to the frontier. Serving and inference are still hard problems when you're talking about a 2 trillion parameter model. Fine-tuning, if that remains a realistic need for businesses, is also a difficult infra problem at that scale. In the most bearish case, where there is no…
Also people are people and they will get emotionally attached to claude :)
I bet many people who use Claude at their workplaces still call it "chatgpt" because chatgpt is getting the kleenex treatment and they have no idea what Claude is
Re: Corporate America is getting hooked on open-source AI
#238Earlier quoted context omitted.
> However the cold reality for both is that there is zero moat to a model anymore. The moat right now is a) the hardware, b) the electricity, c) the intelligence, and d) scalability. On hardware, it's very expensive to purchase anything which can provide a fraction of the performance of a subscription. Traditional accounting depreciation would imply that purchasing local hardware is a terrible financial decision. On…
You’re missing the point that 98+% of the use cases for AI don’t require the latest greatest model and are far better positioned to use the fast-follow distilled cheap models. OpenAI and Anthropic are fighting to win a race (build the biggest baddest model) that has no prize. The prize is mass adoption at scale at the best price, which is why companies are rapidly shifting to open model. They don’t need to pay 10x fo…
Exactly, unless they solve reliability and jaggedness somehow and keep a moat with it, I don't see sudden brilliance with compunding errors leading to substantially more adoption. Most things that need doing in corporate america are quite simple but need reliable follow-through
Re: Corporate America is getting hooked on open-source AI
#239Every 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…
> However the cold reality for both is that there is zero moat to a model anymore. The moat right now is a) the hardware, b) the electricity, c) the intelligence, and d) scalability. On hardware, it's very expensive to purchase anything which can provide a fraction of the performance of a subscription. Traditional accounting depreciation would imply that purchasing local hardware is a terrible financial decision. On…
Actually, the moat is regulatory. Expect these companies to behave themselves in progressively more grotesque and sycophantic ways to get the federal government to make open/foreign models (and their output) illegal. After all, their very survival depends on it.
Re: Corporate America is getting hooked on open-source AI
#240IMO this will be a blip. There’s a lot of talk in the wake of all the Uber handwringing about token spend. Legacy enterprises want to look innovative to Wall Street without spooking them, so it’s easy to hop on the narrative and “show” that they’re innovating in a cost responsible manner. This feels reminiscent of the big push to RAG a few years ago. And, more broadly the skunkworks projects that big companies tout i…
I don't see this being a blip, for multiple reasons. A) the uptime matrix between Github, OpenAI, and Anthropic means that we've faced multiple entire days of not being able to ship org-wide due to our reliance on automated code review and other tooling. Every cloud service baked into our CI pipeline becomes a point of failure. We can't live without AI anymore, but it too often either directly or indirectly gets inte…
Totally hear you on point a/b!
I think ultimately the folks with the purses won’t care enough about a for it to be taken seriously, even if it’s an engineering bottleneck.
B definitely has scope but still smaller than I’d expect. When I was an intern at yelp, I was migrating us off internal credit card management to Braintree/stripe. No one would have imagined outsourcing that in early 2000s. There’s a long tail of stuff that you can’t sent to a 3rd party; but for most use cases it’ll suffice.
For c, true; but this is expensive for everyone, including the Chinese model companies that are trying to undercut Open Ai / anthropic. In the nth degree, i think the field will bring the cost down to the place where it’s manageable (see the existence of the cheap Chinese models). The real question is the $$ spent on pushing the research forward at scale.