Why Do Most AI Startups Use Open Models?

Jensen Huang says the frontier labs are only part of NVIDIA's machines. He puts them at about a quarter of the compute, maybe 30 percent. About a third of the business is ordinary processing. Another third is what he calls cloud computing for the next generation: thousands of new companies renting NVIDIA computers the way an earlier wave rented AWS. Treating two labs as the whole infrastructure story, he says, is a mistake.

Open models are how those new companies start. Huang says 80 percent of the startups use them, not to fight the frontier labs, but to open a different market in physical artificial intelligence, manufacturing, or healthcare. Many customize an open model, including NVIDIA's Nemotron, on data they own, and aim to be extremely good at one domain. He expects the closed labs to push general intelligence, and the specialists to get there in a single field.