It’s about to cost more to use generative AI tools. How do we know this? Let the Verge in You’re about to feel the AI money squeeze count the ways for you.
“Is the era of basically free or close-to-free AI kind of coming to an end here?” said Mark Riedl, a professor in the Georgia Tech School of Interactive Computing. “It’s too soon to say for certain, but there are some signs.”
I like that that this article also covers open source and open weight models too.
David DeSanto, CEO of software company Anaconda, recently returned from a five-week trip around the world speaking to customers. He said that many were moving to self-host AI models — deploying their own within Amazon Bedrock or Google’s Vertex AI to have more control over the supply chain — or changing to open-source or open-weight models for a lot of their needs, since many such models have significantly improved on benchmarks as of late.
I’ve been wondering what sort of squeeze open source would put on these companies. OpenAI and Anthropic are more and more reliant on enterprise businesses who have more easily been sold on FOMO. As costs rise, of course they’ll diversify. As frontier models stall, open source and open weight models will catch up. Simon Willison recently reported surprisingly good results running the latest Qwen open weight models. It’s only a matter of time, it seems, and then where will these companies’ business models be?
I have no idea if there’s a great financial and economic collapse coming with these companies. I get that the economics don’t seem sustainable, but I also know that there’s a bit of wish fulfillment going on with all these “there’s a bubble burst a coming” posts. This Verge article is not like that. It’s a pretty balanced piece, which I appreciate.