"Closed models dominate, with on average 80% of monthly LLM tokens using closed models despite much higher prices - on average 6x the price of open models - and only modest performance advantages. Frontier open models typically reach performance parity with frontier closed models within months, suggesting relatively fast convergence. Nevertheless, users continue to select closed models even when open alternatives are cheaper and offer superior performance. This systematic underutilization is economically significant: reallocating demand from observably dominated closed models to superior open models would reduce average prices by over 70% and, when extrapolated to the total market, generate an estimated $24.8 billion in additional consumer savings across 2025."

This is another sign that the AI bubble almost certainly has to pop. But there's an interesting implication here. Will open-source AI inherit the future?

Linux, Android, MySQL, Git, WordPress - are just a few of the open-source software solutions that dominate modern software & the internet. Will the bedrock of 2030s AI be open-source?

The Latent Role of Open Models in the AI Economy