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Open Models and Maturation: Assessing the Generative AI Market

AI + a16z

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Market Dynamics and Future Trends for Language Models

Language models like LLMs have significant internal use cases for companies. They provide benefits for social media companies by enabling chatbots and analysis, as well as for advertisers by generating accurate and engaging product descriptions. Companies like Meta and Google have strong incentives to develop effective models for their internal use. Despite the availability of open-source alternatives like OpenAI, companies are driven to build proprietary models. The market for language models is expected to evolve with a distinction between open-source and closed-source models, similar to the Linux and Windows divide. The future market is likely to see a mix of captive models built for internal use and a variety of open-source and closed-source models, with companies outside the top tiers struggling to establish a strong presence.

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