Open Sourcing GPTs: Economics of Open Sourcing Advanced AI Models

Fuente: arXiv
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Autore principale: Habibi, Mahyar
Natura: Preprint
Pubblicazione: 2025
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author Habibi, Mahyar
author_facet Habibi, Mahyar
contents This paper explores the economic underpinnings of open sourcing advanced large language models (LLMs) by for-profit companies. Empirical analysis reveals that: (1) LLMs are compatible with R&D portfolios of numerous technologically differentiated firms; (2) open-sourcing likelihood decreases with an LLM's performance edge over rivals, but increases for models from large tech companies; and (3) open-sourcing an advanced LLM led to an increase in research-related activities. Motivated by these findings, a theoretical framework is developed to examine factors influencing a profit-maximizing firm's open-sourcing decision. The analysis frames this decision as a trade-off between accelerating technology growth and securing immediate financial returns. A key prediction from the theoretical analysis is an inverted-U-shaped relationship between the owner's size, measured by its share of LLM-compatible applications, and its propensity to open source the LLM. This finding suggests that moderate market concentration may be beneficial to the open source ecosystems of multi-purpose software technologies.
format Preprint
id arxiv_https___arxiv_org_abs_2501_11581
institution arXiv
publishDate 2025
record_format arxiv
spellingShingle Open Sourcing GPTs: Economics of Open Sourcing Advanced AI Models
Habibi, Mahyar
General Economics
Economics
This paper explores the economic underpinnings of open sourcing advanced large language models (LLMs) by for-profit companies. Empirical analysis reveals that: (1) LLMs are compatible with R&D portfolios of numerous technologically differentiated firms; (2) open-sourcing likelihood decreases with an LLM's performance edge over rivals, but increases for models from large tech companies; and (3) open-sourcing an advanced LLM led to an increase in research-related activities. Motivated by these findings, a theoretical framework is developed to examine factors influencing a profit-maximizing firm's open-sourcing decision. The analysis frames this decision as a trade-off between accelerating technology growth and securing immediate financial returns. A key prediction from the theoretical analysis is an inverted-U-shaped relationship between the owner's size, measured by its share of LLM-compatible applications, and its propensity to open source the LLM. This finding suggests that moderate market concentration may be beneficial to the open source ecosystems of multi-purpose software technologies.
title Open Sourcing GPTs: Economics of Open Sourcing Advanced AI Models
topic General Economics
Economics
url https://arxiv.org/abs/2501.11581