Sam Jacobs raised the possibility that widespread use of cheaper open-weight or small models could be the deflationary event that undermines frontier-lab economics and deflates the AI system. Listen
Sam Jacobs framed this as 'one argument'. OpenAI, Anthropic and others may need to keep selling tokens at expensive rates. If companies move use cases from $100K–$1M per month in frontier-model spend to small models on their own cloud cluster or machines, application gross margins rise. The resulting pressure on the frontier labs, though, could take the air out of the whole system. Asad Zaman noted that NVIDIA wins either way, because open models are also trained and served on its chips.
“it puts such pressure on their economics that that becomes the deflationary event that takes the air out of the entire system.”
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