The proliferation of open-source AI models — more than 1 million are currently listed on the Hugging Face portal — is driving innovation particularly at the application end. DeepSeek has simply ratcheted up this trend an order of magnitude. We can expect attention to shift this year from model developers to those building business applications harnessing this low-cost environment for innovation.
Unlike Microsoft and the PC operating system, Google search, and Meta’s social media, it doesn’t look like any single model developer is going to have a controlling interest in shaping the evolution of AI in the near-term. Co-founder and CEO of IDPartner Systems Rod Boothby sees OpenAI as the dominant model developer so far, offering only unit innovations, whereas Microsoft, Meta, and Google have system innovations that exploit network effects to benefit all system users. Software developers and users have benefited from a stable and widely used PC operating system; website operators can optimize their sites for the dominant search engine; and Google, Instagram, and Facebook users can connect to and follow millions of other subscribers. “Until and unless OpenAI creates a forum where people can interact and profit, it’ll likely remain one model supplier among many, which can easily be replaced,” says Boothby.
Building for the enterprise
As model costs fall and the value from AI migrates up to the application layer, enterprises are going to have even greater choice in business solutions, either from third parties or those developed inhouse. For CIOs with access to the right resources, building applications internally is now a more realistic proposition. This becomes increasingly attractive in the context of complex business processes that may be unique to enterprises. As the costs of running models fall to near zero, the ROI equation shifts dramatically. According to Forrester Research, the ability to run hyper-efficient models like DeepSeek locally on PCs opens up a new era of edge intelligence, which businesses can deploy across organizations.
