Own Your AI Weights or Rent Them?

0:07Aaron: Good morning, good evening, whoever you are, and welcome back to the Enterprise AI Show. This is your host, Aaron, and I'm back in the massive studio. A quick programming note for this show. I'm converting us to a different video and sound editing workflow and tools, and this episode is that first baby step towards the next generation of quality for the show. Hopefully you won't notice many changes today. The goal for this episode was to get something out the door using the new tools, matching or exceeding the previous ones. The only difference of note today is I'm using a new tool to cut out a lot of the filler words and gaps to make the show flow better and easier to listen to.

0:44Aaron: I've also been playing around with jump cut editing, and I might bring that into the workflow soon as well. As always, if you hear something off in the recording, let us know and we will fix it. And as for today's show, Brandon and I discuss the pros and cons of owning or renting your model weights. What does that mean for the enterprise? And what should you be considering? And all of that is coming up right after this quick break. Today's show is sponsored by Nasuni. There's a growing gap in AI right now between what's possible in theory and what successfully works at scale inside an enterprise.

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1:52Aaron: And we're back. And we are continuing our Models and Markets series and joined once again by our guest host, the person who is secretly trying to take over the podcast, Brandon Richard. How are you doing, Brandon? Fantastic. Good to be on again. So what we're going to do, again, for those that aren't familiar, we pick a topic, we talk about why now, we talk about the past, we compare it to something in the past, and then we talk about present and future state as well. And this is something we talked, about it a little bit with the Alex Karpin going back a bit now, his infamous and CNBC segment and the owning your alpha and owning your weights and owning all of your AI and what makes you unique.

2:36Aaron: And it actually, it's funny. The more time has gone by, the more I feel like it has kind of changed the market. At first I was like, oh my gosh, this is a bit like a Jerry McGuire moment, but he seems to have gotten legs with all of it. Jem and Ball picked it up on Cloud of Judgment and on his sub stack. And for those that are out there, again, we recommend you go take a look at his. And it's interesting to me, and we've got some other ones we're going to record after this about NVIDIA and others are kind of picking up this story. And it became really cool overnight to kind of bag on Anthropic and open AI and closed models.

3:14Aaron: And so let's talk about that because I feel like it had its moment and it was very timely, but it almost became timeless all in one shot. What's your thoughts on that? I guess we have to kind of tease apart that rant. There's a lot in there. Yeah, there's a lot he said. So I think let's just focus in on what I think is one of the things he was trying to say in there, right? And he kind of says it, I think for him, he kind of says it in the wrong way. He says something along with like, I want to own my weights, right? or something like that is what he says. And I think he's quick to kind of point out, especially to the financial audience, most people aren't technical, they don't get it.

3:49And it's like, I'd almost throw that back to him. Do you get what you're talking about here? Because the point is, okay, let's 101 here, right? Is you do all the trainings, the output is the weights, right? And that becomes, if you will, the intelligence of how all these tokens are created. So for the most part, once it's like out there, it's old, it's immediately old. So there's like somebody building a new model with new weights that has more information. So I think what he's really trying, and I don't think it's like owning the old weights, like you don't want to own the old weights of like whatever OpenAI 3.0, like it's dead.

4:21No one's using that anymore, right? All those old models are retired for the most part. So what I think he's really just trying to say is training, right? Like we are allowing these Anthropic and OpenAI, they are training data constantly and looking for more data. And the more data that they have access to, the better models that they can make. No argument there. So I think his core kind of thing is, is, and again, like we have to look at like everyone's motivations, right? So for them, for Anthropoc and OBNI, it makes total sense. It's like, we want to build the greatest models we can and we want to have the most information and we want to train it because that's how we're valued.

4:59That's how we make money. If we look at Palantir, to my knowledge, they are not creating a front frontier model of any kind. Tell me if I'm wrong. Okay. And they have come out and explicitly stated that they want that middle layer of their company, I just forgot the name of it, but whatever, like the intelligence layer, let's call it, that they provide, they want to sit on top of models and they want to be, if you will, right? They want to have the expertise of, hey, listen, we know about all your secret data and we'll use the model, but we'll protect the model from seeing all the secret data.

5:31The secret data could be defense data, it could be manufacturing, whatever, right? Now, of course, they're seeing that data, right? So it's okay. So if someone sees this data at some point, but he's making the case of, no, these companies are going to steal everything. And it's, I don't know, to me, it doesn't, just doesn't like make sense of what he's trying to say there. It's yes, these companies are out to make the best model they can and any data that they can get, they'll use. Just like Palantir is trying to interface and use the best LLM to provide the data and the information for their clients.

6:02Right. And they're going to do it. So it makes total sense to me. I can see why they're competing and I can see why he believes that like, I want to have access to public LLM models that are open source, that are the best. And that's what we should do going forward. Now, if you just kind of leave it there, fair, like that simple, in my mind, a simple argument is fair. Like you could say, I believe in open models. I want to be open models. I'm going to invest in building open models, which is part of the, I think that what gets lost in that whole interview, that's why he was originally on the show, right?

6:36To say is that He, his company and NVIDIA have partnered to basically build an open model, right? Makes total sense. Now, I think where he like loses me is just when it's like all these allegations about these model makers and all their devious. He even gets into like international politics and all this other stuff. It's like, he really just like to me, yeah, he just kind of loses me. And I just, and so to kind of just kind of take it back, it's like fair argument to make. I want to use open models. They're better for my company. I think they're better going forward. Fair argument. just like it's a fair argument to say, hey, listen, we can innovate faster in proprietary models like OpenAI and Anthropic are doing.

7:12And we see that those models are producing the best models. At least right now, they're the best models, and maybe not forever, but for the moment, they seem to lead the leaderboards. So I look at it as two people competing, slightly different strategies. This is normal business. It will play out over many years to see who actually wins out and was right. Yeah.

7:29Aaron: And here's the thing. So two things to that. number one every company is always looking for an edge and like whenever you hear this story or you hear others talk in the industry it's always what's their edge right and here's why i'll say that the models now even though yes we're up to what three trillion parameters or thereabouts as that's the top end right now data the publicly available data now sometimes models get trained on sketchy data or data they shouldn't be in the i'm not here to judge that or talk about that but the public amount of data is pretty much gone through so now i remember i want to say it's fable i think fable five now with anthropic like you can't opt out of them capturing your inputs and i think that also started to trigger some of that why because they're looking for an edge they need more data and guess what if you can't opt out it's more data to make their models better so they're looking for an edge and it all goes back to i always try and take something on this and compare it to something different and for those of us that have been in an industry background and done field sales there's a concept of owning the account and so when i worked at a reseller it was a really big deal of like who owned the account was it the reseller or was it the vendor If you're selling them VMware, did the VMware have the better relationship or did you as the partner?

8:53Aaron: Because if they ever got unhappy, who are they going to kick out? You know, kind of thing. And so, like, I also saw his little rant as a little bit of, I want to own the accounts. I want to be the one, you know, the rest, everything else is commodity. I want to be the one you talk to and I want to be the one you call and I want to be your trusted advisor. and all those things we used to always say when we sold to the field. And so for me, this is nothing more than a, like, everyone's trying to commoditize everyone else's play. Yeah. It's the old manager of managers, right? Like, I want to be the manager on top of everything else.

9:32And I think he makes it, you kind of, the way you say it is it comes across as very, like, succinct and almost measured. But, like, what he's, I think when you watch his rant, what he's saying is more than that. He's saying that like, they're stealing from you. They are literally stealing from you. You don't even know what's happening. And they're taking everything from you. They're evil. I am your Batman. I am your protector. I am here. I am the only one that stands between you and you. The phrase he likes to use is alpha. But that's just another word of saying like your competitive differentiation.

10:03Only I am the one that's willing to protect your competitive differentiation because you have to use my thing. And then he would go on and say why that is. And they would go and start to bring in geopolitics into the argument. And it's like, okay, like, I think he just goes so far with it, right? It gets a little, like, to me, it's a little, you know, outside of it's just, and again, maybe that's why he's a billionaire. He's just, people are attracted to these just like grandiose kind of strategies and thoughts where I look at it like, okay, you're more like a regular software CEO who's seeking to protect their base and where they belong inside the customers, which is fine.

10:38Again, that part is fine to me. I just think the other parts, and I just think when I think one thing we don't talk about is, and you know a lot more about this than I, but we're just seeing this weird cycle. I like to talk about a frontier model gets created, right? And then in six months, that is usually an open source model out of China gets close to it. And then, but what people complain about is certainly Anthropic and OpenAI complaint is that the way they're doing that, to your point, is they're distilling Anthropic and OpenAI's model in China where they don't really, they're not respecting the terms of use, right?

11:08because they have different values. And then, but that's how they do it, right? They basically, it's not like they have more data or they have new algorithms. They basically are like, we're going to distill everything that you're doing down. And then they take that and they release it open source. So it then comes back to the United States and then Amazon and Azure, as we talk about other shows, would be like, look, we got the, look, we got an open source model. And it's really, it's like, it was that model's grandfather was probably the model that's one server over, right? Is Anthropics probably sitting in the same room.

11:36And again, I know Anthropics and Dubai I'd be like, this is wrong. We have to stop this. And it's probably, you're probably right, but this is just not how the world works. They're not going to stop doing it. And of course, Anthropic and AI, that's how they're making better models. They're distilling their own models. So it's just everyone's distilling everybody's models and everyone's complaining that everyone else is cheating. But it's just like, at some point it's not cheating. If everyone's doing it, it's like, I don't know, we've talked about college football a little bit with Brian. It's like, at some point if everyone's doing it, it's not really cheating.

12:03It's just how the sport works. And that's kind of how I feel like building models is. It's like, it's just a free for all. And maybe it shouldn't be that way, but that's how it is.

12:10Aaron: And again, we'll go back to this, like the wait file, right? The wait file is nothing more than a frozen snapshot. And these days, it's a frozen snapshot that degrades pretty quickly. We're talking about days, weeks, maybe months, right? Because the industry just keeps moving forward. And what I find super interesting too, is a lot of folks kind of talk about, but in Palantir, even Palantir does. And Jammin talks about it in his Cloud of Judgment. The newsletter on this is, okay, you want to own your weights. Why would you want to own your weights? And it's this whole idea of you want to own your weights and then you want to constantly improve them over time.

12:47Aaron: Maybe it's reinforcement learning, all these other things, but take the model, make it better and effectively have your own model, right? I don't know. I'm increasingly wondering like, okay, is that the best way forward? And that's something we probably don't have time to talk about today. We'll probably talk about that on another episode here. But the whole idea here is I'm actually going to say, okay, is it owning your weights? Is it owning your model? Is it owning your alpha? You need to own something. And maybe that's the problem right now. And that goes into the future of like, what exactly do people need to own?

13:23Aaron: Yeah. I don't know that it's that clear yet. We won't get into it in detail today. But I think the thing that, you know, the question worth asking here is, is it the model or is it the harness, right? Because I highly recommend anyone go through some training, pick your favorite OpenEye Anthropic. Aaron, you've got some companies recommend and be like, okay, like what is it to do when you like build an agent, right? And because one of the things I think you'll learn is one of the things that you have to do as an agent, basically you're responsible for the system prompt, right? You have to give it the prompt, right?

13:49And so what are these code harnesses? What is ClaudeCode and Codex doing? It's like behind the scenes, they've written all these prompts, right? You don't see them, but there's all this prompt engineering that they've thought about. And that's what gives the model the tone. And that's what gives the model why it can understand what you're doing. And they've also taken the time to start to build out skills and build out tools. And it's like that stuff I am finding myself is like I'm starting to get more attached to that than I am actually the model. Because I mentioned like Cloud Code. Like I'm happy.

14:22A lot of times I'm happy to live in the old times and use Sonnet because it's cheaper and I can just do more. Right. But I'm like, I have all my harness that I'm used to in Claude versus if I have to leave and go to something else and I have to relearn the harness and the harness is slightly different, doesn't do things quite the same thing. So back to like someone like Palantir and the whole argument is maybe that's really what they should be able to doing is, listen, we have built and I'm sure they've already done this. Right. They they have their own integration with these models. They probably built their own prompts and people that like Palantir probably use the UI and they like that UI.

14:53So that really may be the place going forward. So it's really not owning the weights because you just want to plug in any model that's good. It's owning all of that prompt and all of those system prompts to actually use it. So maybe that's where it'll ultimately end up where Alex will be happy because he owns all the prompts and their Palantir prompts and they're really good. And they're done it the way he wants. And that's a way to differentiate yourself going forward. Yeah. Ultimately, and again, the future, I'm going to say, goes back to something that has been

15:21Aaron: in the past in our industry for as long as I can remember. And that is all everyone is doing is posturing to lock you in. That's right. That's right. No one wants to be locked in. Everyone wants to lock you in. No one wants to be locked in. And every company on the planet wants to lock you in. Amen, brother. So I think we'll stop there. We just solved both the past and the future all in one statement. All right, Brandon, I appreciate your time. Thank you very much. And everyone out there, thank you very much for listening. We certainly appreciate your time. And if you have any feedback, we would love to hear it.

15:54Aaron: And if you have any ideas for guests and topics for future episodes, please send them our way as well. And with that, I'm going to wrap it up and we will talk to everyone next week. Thanks for listening. Check us out at theenterpriseaishow.com for past shows, newsletters, and all things Enterprise AI. you