What comes next with open models

2025 was the year where a lot of companies started to take open models seriously as a path to influence in the extremely valuable AI ecosystem — the adoption of a strategy that was massively accelerated downstream of DeepSeek R1’s (interconnects.ai/p/deepseek-r1-recipe-for-o1) breakout success. Most of this is being done as a mission of hope, principle, or generosity.
Very few businesses have a real monetary reason to build open models. Well-cited reasons, such as commoditizing one’s complements (gwern.net/complement) for Meta’s Llama, are hard to follow up on when the cost of participating well is billions of dollars. Still, AI is in such an early phase of technological development, mostly defined by large-scale industrialization and massive scale-out of infrastructure, that having any sort of influence at the cutting edge of AI is seen as a path to immense potential value.
Open models are a very fast way to achieve this, you can obtain substantial usage and mindshare with no enterprise agreements or marketing campaigns — just releasing one good model. Many companies in AI have raised a ton of money built on less.
The hype of open models is simultaneously amplified by the mix of cope, disruptive anticipation, and science fiction that hopes for the world where open models do truly surpass the closed labs. This goal could be an economically catastrophic success for the AI ecosystem, where profits and revenue plummet but the broader balance of power and control of AI models (interconnects.ai/p/how-anthropic-vs-dow-impact…) is long-term more stable.
There’s a small chance open models win in absolute performance, but it would only be on the back of either a true scientific breakthrough that is somehow kept hidden from the leading labs or the models truly hitting a wall in performance. Both of them are definitely possible, but very unlikely.
It is important to remind yourself that there have been no walls in progress to date and all the top AI researchers we discuss this with constantly explain the low-hanging fruit they see on progress. It may not be recursive self-improvement to the singularity (more on that in a separate post), but large technology companies are on a direct path to building definitionally transformative tools. They are coming.
The balance of power in open vs. closed models
The fair assessment of the open-closed gap is that open models have always been 6-18 months behind the best closed models (interconnects.ai/p/open-models-in-perpetual-ca…). It is a remarkable testament to the open labs, operating on far smaller budgets, that this has stayed so stable. Many top analysts like myself are bewildered by the way the gap isn’t bigger. Distillation helps a bit in quality, benchmaxing more than closed labs helps perceptions, but the progress of the leading open models is flat out remarkable.
The reality is that the open-closed model gap is more likely to grow than shrink. The top few labs are improving as fast as ever, releasing many great new models (interconnects.ai/p/opus-46-vs-codex-53), with more on the docket. Many of the most impressive frontier model improvements relative to their open counterparts feel totally unmeasured on public benchmarks.
In a new era of coding agents, the popular method to “copy” performance from closed models, interconnects.ai/p/how-much-does-distillation-…, requires more creativity to extract performance — previously, you could use the entire completion from the model to train your student, but now the most important part is the complex RL environments and the prompts to place your agents in them. These are much easier to hide and all the while the Chinese labs leading in open models are always complaining about computational restrictions.
As the leading AI models move into longer-horizon and more specialized tasks, mediated by complex and expensive gate-keepers in the U.S. economy (e.g. legal or healthcare systems), I expect large gaps in performance to appear. Coding can largely be mostly “solved” with careful data processes, scraping GitHub, and clever environments. The economies of scale and foci of training are moving into domains that are not on the public web, so they are far harder to replicate than early language models.
Developing frontier AI models today is more defined by stacking medium to small wins, unlocked by infrastructure, across time. This rewards organizations that can expand scope while maintaining quality, which is extremely expensive.
All of these dynamics together create a business landscape for open models that is hard to parse. Through 2026, closed models are going to take leaps and bounds in performance in directions that it is unlikely for open models to follow. This sets us up for a world where we need to consider, fund, use, and discuss open models differently. This piece lays out how open models are changing. It is a future that’ll be clearly defined by three classes of models.
* True (closed) frontier models. These will drive the strongest knowledge work and coding agents. They will be truly remarkable tools that force us to reconsider our relationship to work.
* Open frontier models. These will be the best open-weight, large models that are attempting to compete on the same directions as above. There will be plenty of use-cases that they don’t work for relative to the best models, but countless use-cases where they work remarkably well. For many use-cases, even ones as valuable as some subsets of coding, these will work great. The AI ecosystem will still take years to understand what it means to have intelligence of this magnitude served in private, at the marginal cost of electricity for individuals, as assistants, coaches, companions, and more. OpenClaw provided a glimpse behind the mirror that will expand and grow. The class of models around GPT-OSS 120B, Nvidia Nemotron 3 Super (developer.nvidia.com/blog/introducing-nemotron…), or MiniMax M2.5 (huggingface.co/MiniMaxAI/MiniMax-M2.5) are the balance of performance to price that can work as local models.
* Open, small models as distributed intelligence. The most successful open models will be complementary tools to closed agents. This is a path for open models to complement and accelerate the frontier of progress.AI is slotting in to automate many repetitive, niche tasks across the technology economy. There’s a huge pressure to shift these tasks off of the best closed models — which frankly are still better at most of the things, across my conversations with businesses trying to build with open models — to small, open models that can be 10X faster and 100X cheaper. There aren’t really people building data and fine-tuning engines for economically viable tasks on the smallest models possible. These models need to be almost brain-numbingly boring and specific. In a world dominated by coding agents, I want to build open models that Claude Code is desperate to use as a tool, letting its sub agents unlock entirely new areas of work. This is possible, but remarkably under-explored. Small models from the likes of Qwen and co. are still marketed on general-task benchmarks. The hype of “open models catching the frontier” distracts the world from this very large area of demand.This is the sort of model that moves open models from just a few, crucial static weights to more of an ecosystem. It requires creativity and a new approach. The goal of this piece is to illustrate why and how to build these, with added context on where open models stand today.
All three of these model classes hint at different ways to use agents. It is absolutely definitional to how AI is going to be built going forward that they’re not just model weights, but rather systems that think, search, and act (interconnects.ai/p/thinking-searching-and-acting). The weights only define one …