On Monday, Decagon CEO Jesse Zhang revealed a provocative new concept, posted below the title “Everyone is wrong about open source AI in the enterprise.” The publish grapples with probably the most attention-grabbing contradictions of at this time’s AI economic system: Extra mature AI deployments are switching to lighter fashions, he says, even at his personal firm. However the total spend on costly state-of-the-art fashions has barely budged.
It’s a brand new means to consider the connection between frontier and open supply fashions. In Zhang’s telling, they aren’t rivals, and open supply fashions’ success isn’t coming on the expense of frontier labs. As an alternative, they’re two phases of the identical life cycle, with costly frontier fashions getting used to show out use circumstances that may be handed alongside to cheaper open supply options as they mature.
As extra mature use circumstances switch to lighter models, new use circumstances preserve arising — and the general spend on frontier fashions barely goes down.
Zhang doesn’t give a lot information to assist the purpose, however the information isn’t laborious to search out. Vercel’s AI gateway dashboard reveals that, in simply the previous week, DeepSeek has surged into the lead for token volumes, now processing simply over a 3rd of the tokens passing by means of the corporate’s infrastructure. Z.ai — the lab behind the favored GLM-5.2 mannequin — jumped into a good fourth place over the identical interval.
However when you scroll right down to total token spend, you’ll see Anthropic nonetheless accounts for greater than half of the general AI spend on the platform. Provided that a lot of the current change comes from Anthropic’s personal rising costs, the share has dropped barely over the previous month, however not considerably.
OpenRouter tells an identical story, capturing a a lot bigger (however barely much less enterprise-y) phase of the market. DeepSeek V4 Flash is the principle winner on total utilization, processing 5.3 trillion tokens weekly. The preferred frontier mannequin, Opus 4.8, handles simply over 2 trillion. OpenRouter doesn’t rank fashions by whole spend, however it registers the common token price for Opus 4.8 as roughly 23x increased than V4 Flash ($1.37 per million tokens, in comparison with simply 6 cents), which might imply Opus was nonetheless in all probability capturing the lion’s share of spending.
These figures don’t even seize the latest arrival, Nvidia’s Nemotron, which is poised to leap to the front of the pack by advantage of Nvidia’s sturdy connections and the mannequin’s personal excessive adaptability.
These figures don’t totally show Zhang’s level in regards to the AI life cycles, however they do present frontier labs like Anthropic aren’t struggling an excessive amount of from the rise of open supply — no less than not but. One clarification is that the market of AI-addressable duties is rising so quick that the highest fashions are in a position to preserve their place simply by dominating early-stage deployments. As Zhang places it, “The frontier labs will preserve proudly owning discovery. Open supply will more and more personal manufacturing.” One other clarification is likely to be that, whilst shoppers transfer to open supply, many use circumstances are so troublesome that they will’t be fully changed with cheaper options.
Both means, this two-tiered economic system of fashions could develop into a comparatively secure function of the AI economic system.
As just lately as final September, I used to be writing in regards to the risk that basis labs would find yourself selling coffee beans to Starbucks — that’s, serving as commodity inputs whereas the applying layer reaped the advantages. Some elements of that prediction got here true: Vertical AI performs switched to lighter fashions, for one, and the economics of “GPT wrapper” startups have remained largely secure.
However we’re additionally seeing that, token for token, frontier suppliers have been in a position to maintain on to essentially the most fascinating a part of {the marketplace} — the premium token worth. And that doesn’t appear prone to change any time quickly.
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