-- Vitalik B. & Tomasz S. in ETH SF

Barriers in today's AI Model Ecosystem

Current AI Model Market: Big Tech Dominates, Smaller Creators Struggle​

Closed‑source LLMs from tech giants hog the spotlight and revenue, crowding out niche models. Their locked code blocks fine‑tuning and remixing, throttling innovation and denying creators true ownership or income.

AI Market Dominance

Expensive Subscriptions vs. Pay-Per-Use: End Users Seek Diverse AI Models​

For media creators, engineers, and everyday users, the current AI model pricing landscape often feels restrictive. Expensive subscription packages lock users into high recurring costs even if they only need occasional access, while pay-per-use options can become unpredictable and costly at scale.

Total Cost: $430/month

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Opportunities: Low-Cost Access & Open-Source Growth

Low-Cost AI Model Boom: Flexible Ownership & investing on the Rise

The rise of low-cost AI models such as DeepSeek is reshaping the landscape by lowering entry barriers and enabling more flexible ownership.

AI News

Open-Source Beats Closed-Source for LLMs​

Open-source large language models are rapidly outpacing closed-source alternatives by offering transparency, adaptability, and community-driven innovation.

Category Open Source LLMs: Fine-tuning + Prompting Closed Source LLMs: Prompt tuning ONLY
Task Specificity Superior for niche tasks (customizable to data). Limited by model's generality; struggles with edge cases.
Data Privacy Full control; sensitive data stays in-house. Risk: Data sent to third-party APIs.
Control Full: Own model weights, data, and updates. None: Dependent on provider's API/features.
Inference Cost Fixed costs after setup; cheaper long-term for large workloads. API costs grow with usage; may become prohibitive.
Latency Low: Hosted locally; no API delays. High: Dependent on external API response times.
Renewable Options Possible: Choose green energy providers. Indirect: Relies on provider's sustainability efforts.
Community Support Strong: Open-source ecosystems enable collaboration. Limited: Restricted to provider's roadmap.
Future-Proofing Flexible: Adapt to new trends (e.g., new architectures). Risky: API changes/pricing shifts may disrupt workflows.