Asking AI: Would you agree with the statement: “The big disruptor to AI is free AI”?

Question 1 of 2 for AI services: There are countless sites carrying freely available AI tools that claim to be able to compete with the products offered by big AI companies. In addition to that there is this quote: “Meta has officially released Code Llama, a new open-source LLM for code completion, generation, and testing, that can be run on local hardware and compete with ChatGPT. The model is available for free for both research and commercial use, and comes in a number of variations to best suit user needs.” List the reasons why freely available AI tools will make it harder for commercial AI makers to recover their costs and for API users of AI companies to monetize their services that may be relying on the costly infrastructure of their wholesale AI provider

ChatGPT-4’s answer:Used Access Link

Thank you for sharing the article. It provides a detailed overview of Meta's new open-source LLM called Code Llama, which aims to compete with existing AI models like ChatGPT for code completion, generation, and testing. The model is available for free and comes in various sizes and specializations to suit different user needs.

Given this context, here are some reasons why freely available AI tools like Code Llama could make it harder for commercial AI makers to recover their costs and for API users of AI companies to monetize their services:

For Commercial AI Makers:

1. Competition: Free tools like Code Llama directly compete with commercial offerings, making it harder for companies to justify the cost of their products.

2. Reduced Market Share: As more users opt for free alternatives, the market share for commercial AI tools may shrink, affecting profitability.

3. Innovation Pressure: Commercial companies will need to innovate more rapidly to offer features that free tools don't have, increasing R&D costs.

4. Customer Acquisition Costs: With free alternatives available, commercial companies may need to spend more on marketing to attract customers, increasing their Customer Acquisition Cost (CAC).

5. Pricing Pressure: The existence of free alternatives could force commercial companies to lower their prices, reducing margins.

6. Open Source Contributions: Companies like Meta releasing open-source tools could lead to a community-driven improvement cycle that outpaces commercial development.

7. Data Privacy: As the article mentions, free tools like Code Llama that can run on local hardware offer data privacy advantages, making them more attractive to certain businesses.

For API Users of AI Companies:

1. Cost Inefficiency: Businesses using costly APIs will find it harder to compete with those utilizing free tools, especially if the performance is comparable.

2. Monetization Challenges: If the end-users are aware of free alternatives, they may be less willing to pay for services built on expensive APIs.

3. Switching Costs: Businesses may consider switching to free alternatives but could face costs related to changing their existing systems.

4. Dependency Risks: Relying on a commercial API means being subject to its pricing changes and service availability, which could be risky compared to using a free, open-source alternative.

5. Data Sovereignty: Free tools that can run locally offer businesses more control over their data, which could be a significant factor in certain industries and regions.

6. Scalability: For startups and small businesses, the cost of scaling services using commercial APIs can be prohibitive compared to free alternatives.

7. Customization: Open-source tools often offer more room for customization, allowing businesses to tailor the tool to their specific needs without incurring additional costs.

The landscape is complex, and commercial AI companies will need to adapt to stay competitive. They may need to focus on specialized services, premium features, or industry-specific solutions to differentiate themselves from free alternatives.

Google Bard’s answer:Sure, here are the reasons why freely available AI tools will make it harder for commercial AI makers to recover their costs and for API users of AI companies to monetize their services that may be relying on the costly infrastructure of their wholesale AI provider:

• Reduced demand for commercial AI products. If people can get the same functionality from freely available AI tools, they will be less likely to pay for commercial AI products. This will reduce the revenue that commercial AI makers can generate, making it harder for them to recover their costs.

• Increased competition. The availability of freely available AI tools will increase competition in the AI market. This will make it harder for commercial AI makers to differentiate their products and services, and it will put downward pressure on prices.

• Higher development costs. Commercial AI makers will need to invest more in research and development in order to stay ahead of the curve. This is because the freely available AI tools will be constantly evolving, and commercial AI makers will need to keep up with the latest innovations in order to offer their customers the best possible products and services.

• Higher infrastructure costs. Commercial AI makers will need to invest in more powerful and scalable infrastructure in order to support the increased demand for their products and services. This is because the freely available AI tools are often hosted on cloud computing platforms, which can be expensive to use.

As a result of these factors, it will be harder for commercial AI makers to recover their costs and to monetize their services. This could lead to some commercial AI makers exiting the market, or it could force them to find new ways to generate revenue, such as by charging for additional features or services.

In addition to the above, freely available AI tools can also pose a security risk. If these tools are not properly secured, they could be used to launch cyberattacks or to spread malware. This could damage the reputation of the commercial AI maker and could lead to legal liability.

Overall, the availability of freely available AI tools is a major challenge for the commercial AI industry. Commercial AI makers will need to find new ways to differentiate their products and services, and they will need to invest in security in order to protect their customers from harm.

Claude’s answer:There are a few key reasons why freely available AI tools could make it harder for commercial AI companies to recover costs and for API users to monetize services:

• Competition - The free tools provide direct competition to paid services, reducing demand and making it harder to attract paying customers. This especially impacts API users trying to build services on top of commercial AI platforms.

• Commoditization - As more free models become available, the technology risks becoming commoditized, with less ability to differentiate paid offerings and command premium pricing.

• Infrastructure costs - The commercial providers still have large infrastructure costs for developing, training and deploying large AI models. If usage shifts to free alternatives, it's harder to recoup these investments.

• Open source development - By open sourcing models like Code Llama, big tech companies enable free community development rather than proprietary control. This can lead to faster innovation of free tools.

• Customer expectations - Once customers get used to free AI tools, they may be less willing to pay for commercial services and API access. Their expectation is set that AI assistance should be freely available.

• Weaker network effects - Paid platforms benefit strongly from network effects as more users attract more users and data. Free alternatives dilute these effects and limit how much value commercial providers can extract.

So in summary, freely available AI can disrupt established pricing, business models and platform dynamics for incumbents. This highlights the need for commercial providers to clearly differentiate their offerings, target specific high-value segments or find alternative monetization approaches.

Question 2 of 2 for AI services: Would you agree with the statement: “The big disruptor to AI is free AI”?

ChatGPT-4’s answer:The statement "The big disruptor to AI is free AI" captures a significant trend but may oversimplify a complex landscape. Here's a nuanced look at why one might agree or disagree with this statement:

Reasons to Agree:

1. Democratization of Technology: Free AI tools make advanced technology accessible to a broader audience, including small businesses, researchers, and individual developers, thereby disrupting the traditional, centralized model of AI development and deployment.

2. Accelerated Innovation: Open-source and free AI tools can lead to faster innovation as a larger community contributes to improving the models and algorithms.

3. Cost Pressure: Free AI puts pricing pressure on commercial AI providers, forcing them to justify the costs of their services and potentially lowering prices across the board.

4. Data Privacy: As mentioned in the article about Code Llama, free AI models that can run on local hardware offer data privacy advantages, which could be disruptive to cloud-based, commercial AI services.

5. Community Support: Free AI often comes with strong community support, which can rival or even surpass the customer service offered by commercial entities.

Reasons to Disagree:

1. Quality and Reliability: Commercial AI services often come with guarantees of service uptime, customer support, and regular updates, which free AI tools may not provide.

2. Specialized Solutions: Commercial AI companies often offer specialized solutions tailored to specific industries or use-cases, which free, generalized AI tools might not be able to match.

3. Safety and Security: Commercial providers may invest more in the safety and security aspects of AI, including ethical considerations, which might not be a focus for free AI tools.

4. Economic Models: The development of AI, free or commercial, requires significant resources. Commercial entities may have a more sustainable economic model to continue advancing the state of the art in AI.

5. Integration and Compatibility: Commercial AI solutions often offer better integration with existing enterprise software ecosystems, which can be a significant advantage for many businesses.

In summary, while free AI is undoubtedly a disruptive force in the industry, it's not the only factor shaping the landscape. Both free and commercial AI have roles to play, and their coexistence is likely to lead to a richer, more diverse ecosystem of AI tools and applications.

Google Bard’s answer:Yes, I would agree with the statement that "The big disruptor to AI is free AI". The availability of freely available AI tools is making it harder for commercial AI makers to recover their costs and to monetize their services. This is because people can get the same functionality from freely available AI tools, and they are less likely to pay for commercial AI products.

In addition, the availability of freely available AI tools is increasing competition in the AI market. This is making it harder for commercial AI makers to differentiate their products and services, and it is putting downward pressure on prices.

As a result of these factors, the commercial AI industry is facing a major challenge. Commercial AI makers will need to find new ways to differentiate their products and services, and they will need to invest in security in order to protect their customers from harm.

However, I also believe that free AI can be a force for good. It can democratize access to AI technology, and it can help to solve some of the world's most pressing problems. For example, free AI can be used to develop new medical treatments, to improve education, and to combat climate change.

Overall, I believe that the availability of free AI is a double-edged sword. It is a challenge for the commercial AI industry, but it also has the potential to do a lot of good in the world.

Claude’s answer:I don't fully agree with the statement "The big disruptor to AI is free AI." Here are a few key reasons why:

• As mentioned earlier, the quality and capabilities gap between advanced commercial AI versus freely available AI is still significant. The big tech companies are constantly innovating to stay ahead.

• "Free AI" today is usually limited to certain basic tasks or capabilities that may not fully disrupt commercial providers focused on enterprise-grade AI.

• The best freely available AI today still requires a lot of technical know-how to use and customize effectively. Commercial AI prioritizes usability and seamlessness.

• While some disruption from free AI tools is likely, the leading commercial AI providers have huge resources, data access, talent and established customers that will be hard to displace quickly.

• "Free" today doesn't always mean open source or freely usable long-term. Many current free AI tools still have significant limitations or uncertaintity on their future licensing and commercial usage.

• AI is already being infused into many existing paid software and services. It will be hard for standalone free AI to disrupt established business models.

So in summary - free and open source AI will definitely have some disruptive impact, but the leading corporate AI offerings still retain significant competitive advantages. "Free AI" may force some pricing pressure and business model evolution, but the big tech companies are likely to continue monetizing AI successfully. The reality will be more nuanced rather than a wholesale disruption of paid AI.