Open Models Change The Economics of AI
Jeffrey Morgan, CEO of Ollama, talks with Y Combinator about how open-source AI models are cutting enterprise costs and giving companies more control than closed alternatives.
The gist
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Open models are expected to handle 80 to 90 percent of enterprise AI workloads, with frontier models reserved for the hardest tasks only.
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Running easier tasks locally on consumer hardware while routing complex ones to the cloud can reduce costs to near zero per token.
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Morgan says control and customization, not just cost savings, are what keep companies on open models once they make the switch.
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The supporting infrastructure, such as knowledge retrieval and agent coordination, will likely split into separate specialist tools rather than one platform.
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