When Do Enterprises Switch to Open Models?

Misha Laskin says enterprises consider open models after they ramp up significant workloads on closed models. He has not seen a straight sprint from renting models to owning them. A company has to pass through the rental stage first. The bill has to become a big enough cost driver before leaders ask how to cut costs and keep work valuable enough to continue.

Spending $100 million or more a year on closed models is not uncommon, and that is when a company starts looking for a better way to do the work. A compute shortage is also bringing machines back on site. An enterprise buying from a favorite hyperscaler very often cannot get enough compute, and good rates are hard to get. A company spending that much might go to Dell, set up bare metal, and serve models inside the enterprise. He treats the role as enabling enterprises to build successful solutions: go in, assess the biggest sources of value, and help where enterprises need more support than teams that already build their own. An enterprise might already have an agent that spans hundreds of millions of customers on closed models and want to scale it out. The scaling factor is very high. Offering inference alone has not worked.

The closed model ecosystem is competitive, and the open model ecosystem looks increasingly competitive too. Large markets tend to be.