Why do companies build open source models?
Posted by Excellent_Koala769@reddit | LocalLLaMA | View on Reddit | 89 comments
Hello,
Why do companies create open source models? They must allocate lots of resources toward this, but for what profit? If anything, doesn't it just take users off of using their paid for/proprietary models?
SadEntertainer9808@reddit
This is going to sound *extremely* cynical, but the open-weight model providers are all Chinese for a reason. That reason is that GPU export controls have left China without the pool of training compute available to US providers, and there has, as of yet, been no architectural innovation that beats pure pretraining compute. Shipping a closed model that is *behind the frontier* is an unappetizing prospect for a serious corporation, particularly if you're trying to establish yourself (and your ecosystem) as a contender, and not "cheap Chinese junk."
Shipping an open model, in contrast, lets you position yourself on an entirely different axis from the one on which frontier labs rest. And it doesn't even cut that drastically into your API bottom line because people who self-host some quantized-to-shit shrunken version of your model (sorry) aren't really your big moneymakers anyway, and the guys with home H100s are pretty few in number. You could experience contention from other cloud providers, in theory… but the only Qwen3.6 Plus provider on OpenRouter is Alibaba, so that's clearly not actually happening.
TL;DR: Shipping open models lets you avoid negative contrast with frontier providers at relatively little cost, while keeping you in the game.
Helpful-Account3311@reddit
The models they are releasing are almost definitely not their flagship models. So there are a few things they get out of it. All of this is speculation.
They build good will with the community. The community takes the models and starts to build really cool tools and workflows which furthers the demand for the models. They are also getting their name out there as a top tier model provider which may make you more likely to use their premium models.
By releasing the models they are getting tens of thousands if not more developers developing stuff for their models totally for free. Not to mention if there are flaws with the models then getting it out there for tons of people to stress test it is a good way to find them. So it could also be that they are prepping for a release of a premium flagship models and want to test smaller variants of it first.
amunozo1@reddit
I would add also to disrupt the SoTA labs.
SadEntertainer9808@reddit
By coming in so consistently behind the frontier that all they do is release pressure from cheapskate users who don't actually need an advanced model?
gsxr@reddit
Standard open source business model…give away an almost good enough tool, that gets users using it. Sell them the last 10% that companies need.
ParthProLegend@reddit
That sounds awesome. Like I would have never thought about it like that. Any subject or book that teaches you stuff like this?
_derpiii_@reddit
It's just a speculation. Typical water cooler talk in tech. I don't mean that in a bad way, it's just normal for SWE to think like this :)
gsxr@reddit
Hate to be that guy, but it’s not. I’ve been a part of 4 successful open core companies. Been in the OSS world since 97….its seriously the business model forged by the likes of redhat, mongodb, MySQL, etc
_derpiii_@reddit
And where exactly would we typically be having this conversation IRL :)
gsxr@reddit
hipchat...clearly.
AppleBottmBeans@reddit
It’s funny that 90% of the squeaky wheels here on Reddit will complain about this model every damn time. “That company” used to be so community-focused and gave everything away for free. Now they got sucked in by money and everything had a price tag. What a bummer!
Uhh lol ya that’s how money works folks…free shit is never free
throwawayacc201711@reddit
The people that use the open source tools become champions of them within the companies.
Example: guys we need something to solve problem X, and here are our potential vendors. Engineer Y says hey I’ve been using some of the tools by vendor Z, I think we should go in that direction for reasons a, b, c. Remember people value opinions of colleagues more than marketing / influencer / YouTubers / etc
Tetrylene@reddit
Genuine question - how can a model be something that can be contributed to by lots of outside developers?
It was my understanding that any model essentially hinges on:
I can sort of see how the former could be contributed to. With the latter I don't see how it could be contributed to like with a traditional open source project with pull requests and whatnot given it's like a black box. With both of those I'd imagine you want one group to be handling those end to end.
It's not as if there's a giant sets of logic you can tweak and contribute to?
On-top of that, the two processes outlined above are super expensive. If those represent the majority of what a model 'is', and it costs a hell of a lot, I still don't see the upside for companies releasing the end result of for free
Ballisticsfood@reddit
There are a few active projects (mostly aimed at academia) aimed distributed (peer-to-peer or centralised) training programs where any researcher can say ‘Hey, I have X GPUS’ and they receive a portion of the training data for someone else’s model (and also access to a distributed training network). NDIF is one example.
Exodus124@reddit
Completely irrelevant to LLM training.
Ballisticsfood@reddit
You’re not wrong. Got myself mixed up with MI research!
setec404@reddit
They also sell them API calls for that model on high end software. Since you can test bench the model locally you can then scale it to cloud.
_millsy@reddit
Completely agree, was going through Changi airport the other day and saw this for qwen, definitely a promotional point as much as anything else
Loose-Average-5257@reddit
They also “might” be using the questions you’re asking in the model for training. Nope, definitely using.
Excellent_Koala769@reddit (OP)
Not if I am hosting it locally.
Excellent_Koala769@reddit (OP)
I like your reasoning here!
Jayfree138@reddit
That's how Nvidia got the world hooked on CUDA. By giving it away for free and that has massively paid off for them. Same deal here.
You want people to build on your tech.
yeawhatever@reddit
CUDA is not open source though.
Pleasant-Shallot-707@reddit
It doesn’t have to be open source to let people use it for free. See Java (Pre Oracle)
yeawhatever@reddit
It doesn't have to, but then it's free and not open source. We disagree, but no harm. No disdain for nvidia either.
Pleasant-Shallot-707@reddit
And open weights models aren’t actually open source
yeawhatever@reddit
A bit pedantic. And chatgpt isn't open source either and people use it for free too. The point is that you can't fix it or maintain it yourself when it breaks. But I don't disagree completely about it being open weights.
yeawhatever@reddit
Pedantic. And chatgpt isn't open source either and people use it for free too. The point is that you can't fix it yourself when it breaks.
yeawhatever@reddit
And chatgpt is free
stoppableDissolution@reddit
Neither are open weight models. Can use, cannot replicate.
yeawhatever@reddit
You mean it's more appropriate to call them open weights isntead of open source? I agree but still, that doesn't mean that CUDA is any more open source somehow. Doom is open source, but the data, art and levels are not. And while it sucks that training data or even the base model often isn't available, I personally still let it pass as open source because the architecture, inference code and training code are open source. You can fix it, improve, finetune or even train your own model on the same architecture with your own data and do inference with the open source ecosystem around it.
stoppableDissolution@reddit
Well, in my book, open-source means "I can in theory remake it from scratch myself" (within reason, model will not be identical because of non-determinism, but largely). Like, idk, latest nemotron. So both open-weight models and cuda are more of a closed freeware than open source software, where you get the assembled "binary" and open harness to use it, but can not tweak the upstream code.
yeawhatever@reddit
completely fair, to be undoubtedly open source it must be open all the way upstream including data.
TurnUpThe4D3D3D3@reddit
Because they’re subsidized by the Chinese government to do so
Minute_Attempt3063@reddit
to me, its freedom. every message you send to chatgpt can, and will be used against you, recoreded, and used for extra training. even if you use the api (which is you paying them, and them using the data)
a open source model, yes, it costs a lot to make esp. in the early days, but if done well, you take away enoug people from the big company who only thinks about marketing and money.
and it is almost never the big models either, unless it is deepseek
Zestyclose_Bass_4208@reddit
China's Ministry of Industry and Information Technology included open-source AI development as guidance in the special-purpose "New Generation Artificial Intelligence Development Plan” (AIDP, 新一代人工智能发展规划) in 2017 and subsequently became part of the 14th and 15th Five Year plans.
Initially this was seen in the open-sourcing of the deep learning frameworks developed by Baidu, Alibaba, and Huawei but has continued into the large language model domain.
The implementation follows a fairly common open source business model, open source R&D (and subsidize costs) while gaining enterprise revenue from SaaS customers who prefer managed solutions.
This aim in the Five Year plans is intended to hasten the development of these technologies in China, support a stable domestic ecosystem for these technologies in China, and to undercut Western private capital investment into speculation on these technologies (open source R&D consumes IP value/market share from closed source AI).
You can learn a lot from reading China's published economic plans, for example mass manufacturing of humanoid robotics has been publicly targeted for 2025 since June of 2017 and we saw this take place with Unitree and others.
AnticitizenPrime@reddit
The fact that Communist China encourages open-source (or weights, whatever) shouldn't be surprising, despite what you feel about communism/socialism vs capitalism or whatever. And I know China's economy is very much a hyrid of socialist and capitalist elements.
But open-sourcing software seems to be something that is line with that socialist/collectivist arm of their philosophy.
ShelZuuz@reddit
Not paying for IP is also something that is in line with their philosophy.
GoldLibrarian3947@reddit
IP is a legal fiction
Only_Play_868@reddit
For some like Meta, I think it's to prove to investors that "they can." Otherwise, it might appear like you're falling behind. Some are driven by regulation. If you open-source a model, you can't be labelled anti-competitive (in that specific domain of your business). Others do it for publicity and competition. Once one company open sources a good model, you might need to release once to show you're still in the race.
CompetitiveCan278@reddit
https://abrarqasim.com/blog/open-source-llms-2026/
nacholunchable@reddit
It actually makes a ton of economic sense for hardware manufacturers. Nvidia, AMD, Memory producers. Otherwise, It acheives good will for up and coming talent.
It also offloads power users off your services, which is not always bad. I, for example, with my $20 chatgpt plan have routinely burned in extreme excess of $20 worth of compute every month like clockwork using just the llm, let alone image gen.. until i loaded up gptoss 120b at home, then they save money, even if i cancel my subscription. My 65 year old mother does use chatgpt with a plan, but i gurantee you she uses less compute than her monthly subscription cost. She will never run an open model, for convenience and skill reasons.
Majestic_Product1111@reddit
very unique perspective!
EmperorOfNe@reddit
It is very simple: The company that can release an open weight model with the highest benchmark results in their field of expertise is the company that will build the next generation of real world technology. If users embrace these models and it can be run on existing hardware, a whole new industry will be opened to the world. The weakness with closed models is their reliance on wired/wireless protocols instead of integration within industrialized settings. Imagine a robot that can be disabled by jamming a signal or cutting a line. These companies take a hit now, to rule the world later.
tonsui@reddit
It’s about winning the infrastructure war. When a company opens their weights, they aren’t "losing" users; they’re forcing the entire dev community to build tools, plugins, and hardware optimizations for their architecture. It’s much harder to switch to a competitor once your entire tech stack is built around a specific open-source framework. You’re essentially getting thousands of the world’s smartest engineers to do your R&D for free, then rolling their best ideas back into your enterprise products.
Savantskie1@reddit
But everyone uses the openai api standard except for a few. Which means that a project built for on can be used for the other. I’ve used several models as my assistant now. So your theory doesn’t really work
Empty-Cake4502@reddit
Open source models are a kind of strategy to show companies' strength and marketing, if the community has a heated discussion about these models, users will build more trust in these models and use them.
VoiceApprehensive893@reddit
its politically beneficial to open source models for china
Key_Credit_525@reddit
Because they can't be competitive with close source models, not bad attempt to take some market share
Karyo_Ten@reddit
https://gwern.net/complement
Mickenfox@reddit
Google is scary good at this. They maintain all of Android just so they can control the Play Store. They managed to control the web platform through Chrome.
asshead1@reddit
This is the answer. It’s a moat - by having fewer competitors with models better than the “freebie” versions.
Excellent_Koala769@reddit (OP)
But wouldn't it give the emerging competitors more of a chance to catch up becuase the weights and techniques are completely open? Instead of the potential competitors starting from zero, now they are starting from an open source model that would have taken lots of capitol to build in the first place.
Eyelbee@reddit
Open weights doesn't mean entire methodology is open. Very few models do that.
Ticrotter_serrer@reddit
See : first to market
1ncehost@reddit
Just yo add to this, the companies releasing OSS models are mostly cloud hosting companies which will benefit from models being commodities hosted on their perfectly suitable hardware. Startups becoming their competitors as datacenter vendors is a major risk and well worth the investment to stop.
Clausewitz_1806@reddit
So people like me who just started running Google's Gemma 4 26B on my PC and then have my Openclaw and Hermes bots running on it for the free API, now realize they're spending more time chatting with their bots on WhatsApp and Telegram and less time using my paid Gemini Pro sub. What? Whoa, nice one Google...lol
Excellent_Koala769@reddit (OP)
Yea that is what I don't understand, these companies will lose business Inevitably.... same thing just happenned to me. I host Gemma 4 31b on my laptop and I plan on cancelling my gpt pro sub soon.
Pleasant-Shallot-707@reddit
Nah. They are integrating their systems with the LLMs so they are adding value able new features to existing subscription systems. They don’t care about individuals.
You might as well say that publishing a programming language will lose them customers
_derpiii_@reddit
There's no one reason to explain. Each open source provider has different motivations (META vs China).
btw I'm going off memory and I'm not an AI, so ya'll calm down in the comments pls.
Let's start with META.
META literally makes billions in profit a year (100+ billion?). At that level, it's easy to launch long term lottery tickets. So let's say you allocate 0.5%, or 500mil/year to launching your own AI, what's the 2 year AOI?
Well, you have the best talent pool (my brightest SWE friends are all over there, leaves Google in the dust), and even if you produce something that's 70% of frontier, now you can use it for your business.
How they're applying it for profit: Meta ads is one area, and it's already has out paid itself over multiple times. Think 10% increase in profit from Meta ads revenue stream, adding a couple billion extra in revenue.
China. Oh boy. This is very nuanced and I'm just beginning to understand it after visiting China. There's cultural, political and strategic reasons.
Strategic: watch this catfish strategy
China always thinks long term. Not months, not years, not decades - but hundreds of years. Creating local competiton in a culture of no sore losers but communal good is a powerful thing. And the government is beelining it (laws, regulations, capital backing, PR, etc). Look up the OpenClaw craze where you have lines of thousands (not hundreds, thousandts) of people lining up for an community OpenClaw install workshop.
And kneejerk downvote me all you want, I'm not pro-China, just stating what I've observed.
Mountain_Patience231@reddit
its a simple economic
Lesser-than@reddit
they have to do the research anyway, most of the opensource models are infact research artifacts. If no one shared their research we would stagnate pretty quickly and investment would stop because it would seem no progress is being made.
ProfessionalSpend589@reddit
That’s a good one - they’re releasing the models not for us, but for the investors to see how good it is.
timwaaagh@reddit
undermining the competition. if your ai is worse than gemma4, it is now completely and totally useless. for companies like mistral that might mean the end.
mdm2812@reddit
How much do you pay for Google or Reddit?
DeepOrangeSky@reddit
But with those, they make money from showing ads to the users, or from collecting a bunch of data about the users.
With local LLM models, they aren't making money from either of those things. So, I'm not so sure it is a good comparison.
Mashic@reddit
OpenAI had the largest market share of AI users. If you're just making as good of an LLM, there is not much reason for people to switch. By making some models free, you give yourself good publicity, and hope people would switch to your paid product once they need to.
Excellent_Koala769@reddit (OP)
the only cost is my attention
IronColumn@reddit
meta started doing it with llama because they wanted to undercut openai. early on, there was a real sense that openai was THE place to send api requests. meta wanted to slow down their consolidation of the market, spread things out, while they worked to keep up
05032-MendicantBias@reddit
Models become obsolete in a matter of weeks to months.
Releasing open source means you get lots of "free labour" as various teams do LORAs quantization, fine tunes, improvements and more.
Think of it like that, pit:
a country with ten private teams are rediscovering everything themselves
against a country with ten public teams releasing open source
Which one you think progresses the fastest and with the lowest cost in this environment. Then when you are close you still have the strategy of witholding the strongest model that most people won't run anyway.
ProxyLumina@reddit
One more thing I want to add:
By letting more people play with those open source (free) models, they can generate ideas of use cases or solutions, that will be helpful for them. Like a brainstorming.
biotech997@reddit
Same reason why open source software or tools exist. It’s not like you can’t have some monetization strategy.
More_Chemistry3746@reddit
ChatGPT was released for free, then Pro tier , then another tier and so on
Fine_League311@reddit
Lange reden und ganz kurzer Sinn! An deiner Stelle würde ich erst mal fragen! What is opensource and WHY
cryyingboy@reddit
open source models are just the free sample that gets you hooked on the api.
Cantonius@reddit
At this point it is China AI vs USA AI. Because of Chip Constraint vs Energy Constraint.
wahnsinnwanscene@reddit
The reasons have changed a bit. Originally with llama, having open weights would mean many users would try quantising, distilling, or generally try different methods of taking the model apart. At that point meta would get free experimentation undertaken by the public plus whetting the appetite for better models. If i remember correctly there was also research into watermarking models and having it survive from user distillation would also be a plus. Consequently kobold and llama.cpp with the different quantization methods that picked up the thread of squeezing these models meant an overall win for everyone. Remember the models released aren't usually the bleeding edge ones. Right now though, the one upsmanship between east and west is great for everyone. We get to try out models locally and see if the techniques in the papers really do work as opposed to research that is usually hidden in the labs.
Illustrious_Car344@reddit
Pretty much what everyone else said. It's effectively a trend towards models becoming less of a proprietary product and more of a rudimentary scientific discovery. The LLM itself isn't really the product by itself anymore, now companies are offering services around their flagship LLMs. Google Gemini isn't "just" an LLM, it's the system around their internal flagship LLM. Any research done with LLMs that don't directly contribute to their proprietary services are sheer byproduct, just another part of all the other code they publish with papers when they discover a new algorithm. As for why they publicize it, as others said, good will, R&D, free publicity, stuff like that. Pretty good stuff to get out of a sheer byproduct.
This could potentially be why OpenAI seems to be falling behind Google - now that creating a state-of-the-art AI agent has shifted from scientific discovery with LLMs to more service building, heavily shifting from what OpenAI excelled at into what Google excels at. As someone else mentioned here about moats, companies could be trying to drown out the competition (especially OpenAI, the king of the hill) with free alternatives that might not be as good as their flagship services (like Gemini being backed by integrating with all of Google's services, both public and internal) but are just as serviceable for rudimentary personal assistants and automation tasks, ones that, even if they don't go to their own business, at least it doesn't go to anyone else's. If you want to see a super blatant example of this, when Pepsi re-released Crystal Pepsi, Coke released their own "kamikaze" product called Coca-Cola Clear, which they deliberately marketed as a "diet" version specifically to sabotage the very concept of clear cola. They knew it would fail in the market, they only made it to give Pepsi one less product to sell. So yes, businesses do that stuff.
TheLocalDrummer@reddit
I assume the reason predates ChatGPT and they just kept the ball rolling. An ML guy who was there for the BERT and Llama 1 release could probably answer this question.
nostriluu@reddit
Some of their staff care about open source. It's a way to undermine competition, which can't survive if the models are free but the infrastructure is expensive. It helps normalize the widespread use of AI. They get free labour from contributors. It's something to point at when people claim they dominate too much.
demostenes_arm@reddit
One major benefit is basically getting R&D for free. Once released the model will be picked by universities and research institutes all around the World who will find ways to improve the model and optimise its use and publish papers on it.
This is also one reason there is not much incentive to open source the largest models - few research institutes have computational resources to improve trillion-parameters models.
jikilan_@reddit
It is the same with why development tools are free
sekh60@reddit
*open weight
ProfessionalSpend589@reddit
Promotion to drive demand /my unprofessional opinion/.
You see that in every other business - companies give small perks to attract people or as a cheap ad. In a working free market some companies may temporary give larger perks than others (all good as long it's not anti-competitive).
Purple-Programmer-7@reddit
If it were me, I’d be releasing them for user feedback too. Every model iteration is R&D… until you get something to product-ize, why not?
Disposable110@reddit
1) Best recruitment tool for top talent (Just look at OpenAI lol) that tends to be very corporate-sceptical
2) General PR / brand recognition / getting technical people following them
3) Grants and subsidies
4) Getting access to more compute, as compute owners want to sponsor this
5) In case of China, it's something the Communist Party of China has high on their priority list as they want AI to be prolific and open with secondary companies building tech on top of open models. Doing what they want gives you lots of good boy tokens while moneygrabbing gets you on their shitlist real fast (See Manus).
BigYoSpeck@reddit
Show of strength. "If our open models are this good, imagine how good the closed services we offer are"
Free R&D. The target audience isn't really us getting to play with them. There are non profit researchers all over the world who publish their findings. Getting your open weight versions of your architecture in their hands is free research
It attracts and appeases the talent who work for them. A lot of the brains behind this field want their work out there in the world, not just locked away in data centers. Labs that let them release even just some of their work are more likely to attract them to work there and these engineers have a lot of leverage to make this demand
Miriel_z@reddit
Get awareness, userbase, then lock best features under paid tier. Once people hooked up, easier to impose fees. Habits is the second nature.
jeekp@reddit
They’re not competitive enough against frontier models @ $20 / mo. Once the big boys end their growth phase and increase prices the Chinese companies will slot in at the lower $20 to $50 / mo price points.