If open weight models are the future, U.S. AI companies are going to have a hard time

The awkward part is that software has a habit of racing toward free once it becomes good enough. If an open weight model delivers 95 percent of the value without recurring API costs, plenty of companies will choose that and spend the savings on integration instead. History keeps rhyming, even if investors hate the tune.

The awkward part is that software has a habit of racing toward free once it becomes good enough

Has it? Jira, Teams, Slack, Google Meet, Cisco WebX… There’s obviously Jitsi but I don’t see companies racing towards it. When it comes to SaaS most companies prefer to pay and be done with it. Few are choosing to host open source solutions. Windows and Mac are also way more popular than Linux in office settings. With LLMs hosting it will be even more complicated because companies will have to invest heavily in GPUs.

If the bubble bursts companies will lose funds to work on new models but someone will still be able to offer existing models as a service. Companies will chose the one with better price and functionality. Being free or not will have little to do with it.

They don’t have to host it themselves. They could use a number of providers for the same model, and basically keep doing whatever they were doing with OpenAI/Anthropic via the exact same APIs.

Of course but they would have to pay for accessing it and the company with more efficient model will offer it at lower prices and most likely win customers. Having open weights doesn’t change anything here.

Of course it does. It prevents oligopolies.