World's Fair 2025
The Rise of Open Models in the Enterprise — Amir Haghighat, Baseten
Overview
Enterprises are increasingly adopting AI, moving beyond simply purchasing verticalized solutions to building their own AI capabilities. While initial adoption often leverages closed-source models from providers like OpenAI and Anthropic, several factors are driving a shift towards open-source models. These include the need for specialized quality, reduced latency, better unit economics for agentic use cases, and a desire for competitive differentiation.
Who should watch
- AI Engineers and Builders exploring enterprise AI adoption.
- Product Managers evaluating AI strategy and tooling.
- Organizations considering the move from closed to open-source AI models.
- Teams facing challenges with AI model quality, latency, or cost.
Key takeaways
- Enterprises are transitioning from buying AI solutions to building them in-house for greater value unlock.
- Initial enterprise AI adoption typically starts with dedicated deployments of closed-source models for security and privacy.
- Cracks are appearing in the reliance on closed models due to limitations in quality for specific tasks, latency requirements, ballooning costs with agentic use cases, and the need for differentiation.
- Open-source models are becoming attractive for enterprises needing to fine-tune for specific tasks like medical document extraction or specialized transcription.
- Latency is a critical factor, especially for AI voice applications, where generic API-based models may not suffice.
- Agentic use cases can lead to significant inference costs, prompting enterprises to explore running models themselves for better unit economics.
- Building and managing inference infrastructure for open-source models involves complex challenges related to performance optimization, reliability, and scaling.
- Optimizing for latency requires deep technical expertise at both the model and infrastructure levels, including techniques like speculative decoding and prefix caching.
Notable quotes
*The value is ultimately unlocked once enterprises feel comfortable to actually build with AI themselves as opposed to just buy verticalized tooling.*
*There are cracks in the assumption that we can actually build on top of these closed frontier models indefinitely.*
*The value is ultimately unlocked once enterprises feel comfortable to actually build with AI themselves as opposed to just buy verticalized tooling.*
Unofficial community note. Prefer the recording for nuance.