IBM CEO: open weight models now deliver 90% of frontier performance at a tenth of the cost
IBM CEO says open weight models are now irresistibly good and cheap on-prem
On IBM's Q3 earnings call, CEO Arvind Krishna said the gap between closed frontier models and open weight alternatives has collapsed since 2024, when top models scored around 70 on broad benchmarks versus 20-30 for open ones. Open models now cost 10-25% of frontier token prices while reaching about 90% effectiveness, making on-prem AI compelling for tasks like summarizing emails, reviewing contracts, and handling customer calls. He expects demand to lift sales of IBM's Spyre accelerator cards.
It's a simple question for any enterprise. Would you like something that's 10 percent of the cost if it's 90 percent as good as the best, or do you want to pay that 10 times higher cost?